On Tuesday, Roth/MKM maintained a Sell rating on Upland Software (NASDAQ: NASDAQ:UPLD), while reducing the stock's price target to $2.50 from the previous $3.00. This move comes after the company reported its fourth quarter results for the fiscal year 2023, which aligned with subdued expectations, showing continued declines in revenue and adjusted EBITDA.
Upland Software's revenue for the quarter was the lowest since the first quarter of 2020, and its adjusted EBITDA dropped to a level not seen since the third quarter of 2018. The company's recent performance marks a continuation of a downward trend that began in mid-2022.
The company's guidance for the first quarter of 2024 suggests a further decline in revenue, with expectations for adjusted EBITDA to remain approximately flat. Despite these projections, the most positive forecast from Upland Software anticipates finishing the year 2024 with 3% organic growth.
The firm reiterated its Sell rating on Upland Software shares, adjusting the price target to reflect the company's recent performance and near-term expectations. The revised target of $2.50 represents a decrease from the prior target, signaling caution regarding the stock's potential for recovery in the near future.
InvestingPro Insights
As investors weigh Roth/MKM's Sell rating on Upland Software, a glance at the real-time data from InvestingPro can provide additional context. The company's market capitalization stands at a modest $88.87 million, with a negative P/E ratio of -0.72, reflecting investor concerns about profitability. Notably, Upland Software has not been profitable over the last twelve months, as evidenced by a -4.53 USD diluted EPS for the same period. Despite this, there's a significant return of 47.69% over the last week, hinting at a potential short-term investor optimism or a market correction.
From the InvestingPro Tips, it's worth noting that two analysts have revised their earnings upwards for the upcoming period, perhaps seeing a silver lining in the company's future performance. Additionally, while analysts anticipate a sales decline in the current year, they predict that the company will be profitable this year. This mixed outlook is reflected in the current price of $3.19 USD, which is above both the analyst target fair value of $3 USD and the InvestingPro fair value estimate of $3.52 USD.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available, which can be explored on the InvestingPro platform. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a full suite of insights and analytics to inform their investment decisions.
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