On Friday, Cantor Fitzgerald adjusted its outlook on Avepoint Inc. (NASDAQ:AVPT) stock, a leading cloud data management solutions provider, by increasing the company's price target to $13.00, up from the previous $11.00, while reiterating an Overweight rating.
The revision came following Avepoint's announcement of a robust financial performance, which included a top and bottom line beat and raise.
The company's Annual Recurring Revenue (ARR) saw a significant year-over-year increase of 22.8%. This growth is seen as a more accurate reflection of the company's health, as Avepoint has strategically shifted focus away from TLS and Services revenues.
This strategic pivot has resulted in a noticeable improvement in the composition of Avepoint's revenue, with SaaS revenue growing by 980 basis points as a percentage of total revenue compared to the same period last year. The firm emphasized this change as an indicator of enhanced predictability and transparency in Avepoint's business operations.
Cantor Fitzgerald highlights Avepoint's position as a critical connector between AI deployment and enterprises, particularly for those with limited risk exposure. The company's Managed Service Provider (MSP) sales approach is credited with providing a buffer against the broader market weaknesses affecting small and medium-sized businesses (SMBs).
The revised price target is based on a 7x 2024 estimated EV/Sales multiple, which is an increase from the previous 6.0x multiple. This adjustment reflects the firm's confidence in Avepoint's continued growth and the strength of its business model.
InvestingPro Insights
With a recent upward adjustment in Avepoint Inc.'s (NASDAQ:AVPT) price target by Cantor Fitzgerald, investors may find additional insights from InvestingPro valuable. The company holds a notable position in terms of liquidity, as it holds more cash than debt on its balance sheet, which could provide a degree of resilience in fluctuating market conditions. Furthermore, Avepoint's net income is anticipated to grow this year, a positive sign for potential investors looking for growth opportunities.
From a valuation standpoint, Avepoint's market capitalization stands at $1.88 billion. Despite a challenging P/E ratio, which is currently negative, reflecting the company's lack of profitability over the last twelve months, analysts predict a turnaround with the company expected to be profitable this year. The company's revenue growth also paints a promising picture, with an 18.69% increase over the last twelve months as of Q1 2024, and a quarterly revenue growth of 25.12% in Q1 2024.
InvestingPro Tips also highlight that Avepoint's liquid assets exceed its short-term obligations, which can be crucial for maintaining operations and investing in growth without the immediate pressure of debt repayment. Additionally, Avepoint has seen a strong return over the last three months, with a 25.56% price total return, which aligns with the positive outlook provided by Cantor Fitzgerald. For those interested in further analysis and additional InvestingPro Tips, 9 more are available, offering a comprehensive view of Avepoint's financial health and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.