On Wednesday, Oppenheimer raised the price target for Couchbase Inc (NASDAQ: BASE) shares to $36, up from the previous target of $25, while maintaining an Outperform rating. This adjustment follows Couchbase's fourth-quarter earnings, which surpassed consensus estimates.
The company reported a significant annual recurring revenue (ARR) growth of 24.7% year-over-year and a dollar-based net retention rate (DBNRR) exceeding 115%.
Couchbase's financial performance in the fourth quarter was bolstered by robust ARR growth per customer, which increased by 12.4% compared to the previous year, and an acceleration in the growth of total customers. The momentum in the underlying business was attributed to the strength in Capella migrations, a cloud-based database as a service offered by Couchbase.
Despite the company's conservative guidance for full-year revenue and ARR, which was only modestly above Wall Street expectations and in line with ARR forecasts, respectively, Oppenheimer sees room for positive developments.
The firm believes that Couchbase's management has accounted for potential macroeconomic uncertainties and the timing of large Enterprise deals and Capella consumption with a conservative outlook.
Oppenheimer's stance is that the solid underlying business momentum presents an attractive setup for Couchbase in the calendar year 2024, which corresponds to the fiscal year 2025 for the company. The revised price target reflects the firm's confidence in Couchbase's performance and potential for upside in the coming year.
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