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On Thursday, Baird analysts revised their perspective on Amplitude Inc (NASDAQ:AMPL), currently trading at $11.85 with a market capitalization of $1.54 billion, elevating the stock from a "Neutral" rating to "Outperform." Accompanying this upgrade, they also increased the price target to $17.00, a notable rise from the previous target of $12.00. This adjustment followed Amplitude’s strong performance in the fourth quarter of 2024, where they exceeded top-line expectations and provided an optimistic outlook for 2025 that surpassed the consensus.
Amplitude’s fourth quarter results were bolstered by significant product and platform enhancements, strategic go-to-market (GTM) changes, and improved execution, which Baird analysts believe could lead to a reacceleration of the company’s growth. The company maintains strong fundamentals with a 74.23% gross profit margin and $292.54 million in revenue. According to InvestingPro, Amplitude holds more cash than debt on its balance sheet, suggesting financial stability. Despite acknowledging the ongoing macroeconomic challenges, the analysts noted that Amplitude is well-positioned to benefit from any upticks in spending within its sector.
The analysts also highlighted the favorable competitive landscape for Amplitude and suggested that the current valuation, approximately 4 times the next twelve months’ enterprise value to revenue (NTM EV/revenue), presents an opportunity for multiple expansion. With a price-to-book ratio of 5.22 and a significant 35.27% price return over the past six months, the stock shows strong momentum. This potential for an increase in valuation multiples is tied to the anticipation of growth reacceleration for the company. Discover more detailed valuation metrics and insights with InvestingPro’s comprehensive research report.
Amplitude’s guidance for the year 2025, which was announced in their recent earnings report, has set expectations above the general market consensus, further fueling the analysts’ positive outlook. While currently unprofitable, InvestingPro analysis indicates analysts expect the company to turn profitable this year. Baird’s analysts concluded that Amplitude’s strategic initiatives and strong market position merit a more optimistic assessment of the company’s stock, leading to the rating upgrade and increased price target.
In other recent news, Amplitude Inc. reported its fourth-quarter 2024 earnings, exceeding analyst expectations with earnings per share of $0.02, compared to the forecast of $0.01. The company’s revenue for the quarter reached $78.1 million, surpassing the anticipated $76.56 million, marking a 9% year-over-year increase. For the full year 2024, Amplitude achieved a revenue of $299 million and an annual recurring revenue of $312 million, reflecting a $13 million increase from the previous quarter. Looking ahead, the company provided an optimistic outlook for 2025, with revenue guidance set between $325 million and $331 million, indicating a 10% growth. Amplitude also announced strategic investments aimed at enhancing its go-to-market approach and driving multi-product adoption, which are expected to improve sales efficiency. In a significant analyst move, DA Davidson upgraded Amplitude’s stock rating from Neutral to Buy, raising the price target to $16.00 from $12.50, citing strong enterprise momentum and a positive outlook. These developments highlight Amplitude’s focus on enterprise market expansion and product innovation as key drivers of its growth strategy.
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