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Investing.com - Baird downgraded Couchbase Inc (NASDAQ:BASE) from Outperform to Neutral on Monday, while raising its price target to $25.00 from $22.00 following the company’s acquisition announcement. The stock has shown remarkable momentum, delivering a 28% return in the past week and over 60% gain in the last six months.
Last week, Couchbase announced it had entered into an agreement to be acquired by Haveli Investments in an all-cash transaction valued at $1.5 billion, representing $24.50 per share for stockholders. According to InvestingPro data, the company maintains strong financial health with more cash than debt and a healthy current ratio of 1.87x, despite not being profitable in the last twelve months.
Baird’s price target adjustment reflects the takeout price offered in the acquisition deal, which represents a premium over the database company’s previous trading levels.
The investment firm views the acquisition offer as favorable, noting it values Couchbase at approximately 4.6 times its estimated FY’27 annual recurring revenue and about 5.7 times its projected FY’27 total revenue.
The downgrade to Neutral comes as Baird considers the takeover premium appropriate given Couchbase’s growth profile and profitability targets, effectively capping further significant share price appreciation beyond the acquisition price.
In other recent news, Couchbase Inc. has entered into an agreement to be acquired by Haveli Investments in an all-cash transaction valued at approximately $1.5 billion, or $24.50 per share. This acquisition price represents a 67% premium to Couchbase’s stock price as of March 27, 2025, and a 29% premium to the June 18, 2025, closing price. Following the acquisition announcement, William Blair downgraded Couchbase from Outperform to Market Perform, while Rosenblatt Securities downgraded it from Buy to Neutral, both reflecting limited upside potential beyond the acquisition price. Rosenblatt also adjusted its price target to match the acquisition offer at $24.50.
In other developments, Couchbase reported mixed first-quarter results, with annual recurring revenue (ARR) growing by 21% but overall revenue increasing by only 10%. UBS raised its price target for Couchbase to $20, citing stable enterprise traction despite concerns over revenue growth. Piper Sandler also raised its price target to $20, maintaining an Overweight rating due to Couchbase’s strong first-quarter performance and strategic growth initiatives. The analysts from Piper Sandler pointed out the significant growth in Capella’s ARR, which accelerated to 84% year-over-year. Despite potential risks from competitors like Databricks and Snowflake (NYSE:SNOW), Couchbase’s ongoing momentum and favorable market conditions were highlighted as positive factors.
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