Amplitude stock rating upgraded to Buy at DA Davidson

Published 20/02/2025, 07:06
Amplitude stock rating upgraded to Buy at DA Davidson

On Thursday, DA Davidson analysts revised their stance on Amplitude Inc (NASDAQ:AMPL), raising the stock rating from Neutral to Buy and increasing the price target to $16.00, up from the previous $12.50. The upgrade reflects a positive outlook on the company’s performance and future prospects following a year of strong enterprise momentum. According to InvestingPro data, Amplitude maintains a FAIR financial health score and holds more cash than debt on its balance sheet, with a robust current ratio of 2.55.

Amplitude’s fourth-quarter 2024 revenue surpassed expectations, and its initial guidance for 2025 suggests a year-over-year growth of 10% at the midpoint, which is higher than the consensus estimate of 7.6%. DA Davidson’s analysts noted these results as indicators of the company’s top-line reacceleration being sustainable into 2025 and beyond. The company’s stock has shown strong momentum with a 35% gain over the past six months, and InvestingPro analysts project profitability for the current year.

The analysts also pointed out Amplitude’s strategic investments aimed at enhancing its go-to-market (GTM) approach for enterprise clients and driving multi-product adoption. These initiatives are expected to improve sales efficiency and potentially lead to further top-line growth.

The revised price target of $16.00 is based on a valuation of 5 times the company’s projected 2026 enterprise value to sales. The upgrade to a Buy rating comes after a reassessment of Amplitude’s quicker-than-anticipated business turnaround.

Amplitude, a digital optimization company, has demonstrated a capacity to adapt to market demands and strengthen its position within the enterprise sector. The positive adjustments by DA Davidson reflect confidence in the company’s strategic direction and its ability to maintain growth in the coming years.

In other recent news, Amplitude Inc. reported its fourth-quarter 2024 earnings, exceeding analyst expectations. The company achieved an earnings per share of $0.02, surpassing the forecast of $0.01, and revenue reached $78.1 million, beating the anticipated $76.56 million. Amplitude’s annual recurring revenue saw a $13 million increase from the previous quarter, reaching $312 million. The company’s strategic focus on enterprise accounts and multi-product deals contributed to its growth, with 67% of new enterprise agreements in Q4 being multi-product. Amplitude has provided an optimistic outlook for 2025, with revenue guidance set between $325 million and $331 million, indicating a 10% growth. The company plans to launch an AI agent product in the second half of 2025 to further expand its platform capabilities. Additionally, Amplitude’s executive team highlighted the importance of building a durable enterprise SaaS business and emphasized the company’s long-term growth strategy. The company is also addressing potential challenges, such as market competition and economic uncertainties, to maintain its growth trajectory.

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