On Wednesday, Piper Sandler reaffirmed its Overweight rating and $46.00 stock price target for Intapp, Inc (NASDAQ:INTA), a professional services industry software provider. The firm's decision follows Intapp's fourth-quarter financial results, which showed significant revenue growth and margin expansion. The company's performance was largely attributed to gains in wallet share and the acquisition of new clients, known as "new logos."
Intapp's growth has been particularly strong in its Cloud segment, with Cloud Annual Recurring Revenue (ARR) increasing by 33% year-over-year. The company's overall Net Revenue Retention (NRR) stood at 116%, with Cloud NRR even higher at 121%, signaling strong momentum in cross-selling and upselling among existing customers.
Despite a 9% year-over-year decline in Services revenue, Piper Sandler views this decrease positively, as it reflects Intapp's strategic shift towards leveraging its partnership ecosystem, which is expected to enhance sales channels and profit margins.
The company has also reported an increase in its client base, with the number of clients contributing more than $100,000 in ARR rising to 698 from 603 in the previous year. Furthermore, Intapp now boasts 73 clients that generate over $1 million in ARR, compared to 53 such clients a year ago. This growth in high-value clients is indicative of the company's strengthening position in the market.
Looking ahead, Intapp has set its fiscal year 2025 revenue guidance, projecting approximately 15% annual growth, which aligns with consensus estimates. The company also anticipates higher operating margins and earnings per share (EPS) than previously expected. Piper Sandler's continued support for Intapp is based on these positive financial indicators and the company's clear trajectory for growth.
In other recent news, Intapp delivered strong financial performance, exceeding consensus estimates for its fiscal year 2024. The company's total Annual Recurring Revenue (ARR) increased 22% year-over-year to $404.2 million, with Cloud ARR seeing a significant rise of 33%. Intapp also introduced an initial outlook for fiscal year 2025, projecting ranges for SaaS & Support revenue, total revenue, and earnings before interest and taxes (EBIT) that surpass consensus estimates.
In addition, Intapp has made strategic acquisitions, including Transform Data International (TDI), and unveiled new generative AI capabilities. Intapp's software was selected by Argonaut Private Equity for automating the oversight of personal trading activities, emphasizing Intapp's commitment to leveraging technology for professional service firms.
However, analyst notes reveal a mixed outlook for the company. While BofA Securities, Citi, and Stifel maintained their Buy rating on Intapp, Oppenheimer downgraded Intapp's stock from Outperform to Perform due to concerns over increased competition and challenges within the AI industry. These recent developments provide insights into Intapp's performance and future prospects.
InvestingPro Insights
As Intapp, Inc. (NASDAQ:INTA) continues to demonstrate its potential for growth and market penetration, a closer look at some key financial metrics from InvestingPro can provide additional context for investors. With a market cap of $2.5 billion, Intapp is trading at a high Price / Book multiple of 6.47, which suggests that investors are willing to pay a premium for the company's book value, possibly due to its growth prospects. The company's revenue has grown by 23.81% over the last twelve months as of Q3 2024, reinforcing the positive outlook presented by Piper Sandler.
InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, indicating confidence in the company's future performance. Furthermore, Intapp's significant return over the last week of 7.8% reflects investor optimism following recent developments. It's important to note, however, that Intapp has not been profitable over the last twelve months, which is a factor for investors to consider. Nonetheless, analysts predict the company will be profitable this year, aligning with the positive revenue guidance issued by Intapp itself. For those interested in a deeper analysis, InvestingPro offers additional tips on Intapp at https://www.investing.com/pro/INTA.
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