On Wednesday, Everbridge (NASDAQ:EVBG) experienced a shift in stock rating as Raymond James adjusted its stance on the company from Outperform to Market Perform. This move follows the recent announcement that Everbridge will be acquired by private equity firm Thoma Bravo in a deal valued at $1.5 billion.
The revision in rating comes as Everbridge's shares are trading close to the acquisition offer price of $28.60. The analyst at Raymond James believes that the completion of the deal is highly probable, with the current trading price of Everbridge at $28.15 reflecting a valuation of 15 times the firm's estimated 2024 EBITDA. This valuation aligns with the growth expectations for software companies with sub 10% growth rates.
The acquisition agreement includes a 25-day "go-shop" period, which allows Everbridge to seek alternative proposals. However, the analyst anticipates that no superior bids will emerge and that the current deal represents a favorable outcome for both parties involved.
Everbridge's management has indicated expectations for the acquisition to be finalized in the second quarter of 2024. With the share price closely mirroring the offer and little chance of a competing bid, the analyst sees minimal potential for additional gains in Everbridge's stock value.
InvestingPro Insights
Everbridge (NASDAQ:EVBG) has been a topic of intense discussion following the acquisition news and the subsequent adjustment of its stock rating by Raymond James. To provide a more comprehensive picture, let's delve into some key metrics from InvestingPro and InvestingPro Tips that could be relevant for investors monitoring the company's performance and the acquisition's implications.
The company's Market Cap stands at $1.16 billion, reflecting its current market valuation. Despite recent challenges, Everbridge is expected to see net income growth this year, a positive sign for potential investors. This aligns with the analyst's view at Raymond James, who suggests that the acquisition by Thoma Bravo is a favorable outcome for the company.
InvestingPro Data further reveals that Everbridge's Revenue Growth over the last twelve months as of Q3 2023 was 7.8%, indicating a modest upward trend. However, it's important to note that the company has been trading at a high EBITDA valuation multiple, which is consistent with the analyst's observation that the stock is valued at 15 times the firm's estimated 2024 EBITDA.
From the InvestingPro Tips, two notable points stand out. Firstly, the stock's Relative Strength Index (RSI) suggests that it is currently in overbought territory, which could be a signal for investors to exercise caution. Secondly, investors should be aware that the company has not been profitable over the last twelve months, which is a critical factor to consider when evaluating the company's long-term financial health.
For those looking to dive deeper into Everbridge's financials and stock performance, InvestingPro offers additional insights. There are 9 more InvestingPro Tips available for Everbridge, which can be accessed by visiting: https://www.investing.com/pro/EVBG. To enhance your investment strategy, use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
As the acquisition by Thoma Bravo progresses, these InvestingPro insights can help investors stay informed and make more educated decisions regarding their interest in Everbridge.
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