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On Wednesday, BMO Capital Markets maintained its Outperform rating on Coveo Solutions (CVO:CN), with a steady price target of Cdn$10.00. The affirmation follows the company’s fourth-quarter results for fiscal year 2025, which were reported to align with expectations. Coveo’s guidance for the first quarter of fiscal year 2026 and the full year also met projections for SaaS revenue, but EBITDA estimates were lower than anticipated. This is attributed to the company’s increased investments aimed at leveraging its market opportunities, although it still expects to remain cash flow positive.
Analysts at BMO Capital have slightly increased their revenue projections for Coveo Solutions while decreasing their EBITDA forecasts. The rationale behind this adjustment is the company’s strategic decision to ramp up investments. Despite the reduction in EBITDA expectations, BMO Capital’s outlook remains positive due to Coveo’s significant market position, robust customer base, and management’s target for high-teens SaaS growth in fiscal year 2026.
Coveo Solutions, which specializes in AI-powered search and recommendations, is seen by BMO Capital as significantly undervalued. The firm’s analysts believe that the company’s stock price does not fully reflect its strong standing in the market and its potential for growth. Coveo’s management team has set ambitious goals for the upcoming fiscal year, and BMO Capital views these targets as attainable based on the company’s current trajectory.
The analyst from BMO Capital, in his commentary, emphasized Coveo’s commitment to accelerating growth. He noted the company’s robust customer list and market position as key factors that support the Outperform rating. The analyst’s confidence in Coveo’s strategy and growth potential is evident in the reiterated rating and price target.
Investors and market watchers will be monitoring Coveo Solutions as it continues to invest in its platform and pursue growth in the SaaS sector. With the company’s focus on maintaining cash flow positivity while expanding its reach, BMO Capital’s reaffirmed Outperform rating serves as an indicator of Coveo’s anticipated performance in the coming fiscal year.
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