On Tuesday, TD Cowen showed continued optimism for Asure Software (NASDAQ: NASDAQ:ASUR), as analyst Bryan Bergin increased the price target on the company's shares to $13.00, up from $11.00. The buy rating held by the firm remains unchanged. With a market capitalization of $307 million and a strong analyst consensus rating of 1.33 (Strong Buy), the company has garnered significant attention.
Bergin's outlook for the company's fourth-quarter results is neutral, expecting them to align closely with Street expectations, which are slightly below the company's guidance midpoints. According to InvestingPro, the next earnings report is scheduled for March 13, 2025.
The analyst's balanced stance is influenced by Asure Software's recent share performance, which has seen a 33% increase over the last three months. InvestingPro data confirms this strong momentum, showing a 28.4% return over the past six months and an impressive YTD return of 21.57%.
Despite this growth, Bergin notes there is no perceived upside to the company's preliminary fiscal year 2025 guidance in relation to the upcoming earnings report. This perspective is based on what is considered an undemanding valuation at 2 times the enterprise value to sales (EV/S) for the calendar year 2026 estimates. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with notable metrics including an impressive gross profit margin of 68.55%.
The revised price target of $13 is founded on a 2.4 times multiple of the projected calendar year 2026 EV/S. Asure Software's management is expected to reaffirm its preliminary fiscal year 2025 guidance, providing investors with a clearer picture of the company's financial trajectory.
Asure Software's performance in the stock market and its valuation metrics will be closely monitored by investors as the company prepares to release its fourth-quarter results. The new price target by TD Cowen reflects a positive outlook for the company's growth potential and market position.
In other recent news, Asure Software reported a steady Q3 revenue of $29.3 million, reflecting no change year-over-year. However, the company saw a significant rise in recurring revenue, now making up 98% of total revenue, and a substantial growth in backlog. Asure Software also completed 12 acquisitions in the past year, which contributed $15 million to the recurring revenue.
The company has updated its 2024 revenue guidance to $119-$121 million and anticipates an adjusted EBITDA margin of 18%-19%. Initial 2025 revenue guidance is set at $134-$138 million with an adjusted EBITDA margin of 23%-24%. Asure Software also plans to introduce AsurePay and new solutions for small businesses.
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