On Monday, Barclays maintained its Equalweight rating on Procore Technologies , Inc (NYSE:PCOR) stock with a steady price target of $64.00. The firm anticipates a year-over-year increase of 13% in committed Remaining Performance Obligations (cRPO) as Procore approaches a sales transition.
This projection indicates a quarter-over-quarter deceleration of three percentage points, which Barclays suggests might be a cautious estimate. However, they advise against drawing long-term conclusions from this figure due to the anticipated multi-quarter influence of the sales transition.
Procore, a leading provider of construction management software, is set to report its earnings on October 30 after the market closes. As part of the upcoming financial disclosure, Barclays expects Procore to present a preliminary financial outlook for the fiscal year 2025 at their Analyst Day.
The assessment by Barclays reflects a watchful stance on Procore's performance metrics as the company navigates through changes in its sales structure. The forecasted 13% growth in cRPO, a key indicator of future revenue, is a focal point for the firm's expectations leading up to the earnings release.
Barclays also highlights the importance of the forthcoming Analyst Day, where Procore is anticipated to outline its long-term financial trajectory. This event is expected to provide investors with greater insight into the company's strategic plans and financial goals for the next several years.
Investors and stakeholders in Procore Technologies will be looking to the earnings report and the Analyst Day presentation for confirmation of the company's growth trajectory and the effectiveness of its sales transition strategy. The maintained Equalweight rating and price target suggest a neutral outlook from Barclays on Procore's stock performance in the near term.
In other recent news, Procore Technologies has reported a 24% year-over-year revenue increase in the second quarter of 2024, reaching $284 million and setting a goal to exceed $1 billion in full-year revenue.
Amid these developments, BMO Capital Markets maintained its Outperform rating on Procore, anticipating modest improvements in third-quarter revenue and EBIT margin.
Similarly, Baird initiated coverage on Procore with an Outperform rating and a $73.00 price target, recognizing the company's leadership in construction management.
DA Davidson maintained a Neutral stance on Procore, with a consistent price target of $60.00, expressing cautious optimism about the current indicators in the construction sector. Concurrently, KeyBanc reiterated its Overweight rating on Procore, maintaining a $68.00 price target, following a recent meeting with Procore's financial leadership.
TD Cowen also maintained its Buy rating and $65.00 price target for Procore, following a webinar detailing the company's new go-to-market changes.
These changes, aimed at enhancing customer relationships and increasing product adoption rates, are seen as logical steps towards capturing a larger share of the enterprise market and expanding internationally. These are some of the recent developments within Procore Technologies.
InvestingPro Insights
Complementing Barclays' analysis, InvestingPro data reveals some intriguing aspects of Procore Technologies' financial health. The company's revenue growth remains robust, with a 27.83% increase over the last twelve months as of Q2 2024, aligning with Barclays' expectation of continued growth. This is further supported by an impressive gross profit margin of 82.59%, highlighting Procore's efficiency in its core business operations.
InvestingPro Tips indicate that 11 analysts have revised their earnings upwards for the upcoming period, which could be a positive signal ahead of the October 30 earnings report. Additionally, the company is expected to become profitable this year, potentially marking a significant milestone in its financial journey.
However, investors should note that Procore is currently trading at a high revenue valuation multiple, which may factor into Barclays' cautious Equalweight rating. For a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide deeper insights into Procore's financial position and market valuation.
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