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On Wednesday, JMP Securities analysts maintained their Market Outperform rating and $15.00 price target for EverCommerce Inc (NASDAQ:EVCM). The reaffirmation follows an announcement made on Tuesday that EverCommerce is exploring strategic options for its MarTech solutions. This process, which began in late 2024, is expected to culminate in a sale by the end of 2025. Consequently, the company’s 2025 guidance will exclude MarTech, treating it as a discontinued operation until the sale is finalized. According to InvestingPro data, the company appears undervalued at current levels, with analyst targets ranging from $11 to $15.
EverCommerce’s shares remained unchanged on Tuesday, after the news was made public, despite a year-to-date decline of 17%. This performance contrasts with the broader Russell 3000 index, which has seen a 6% decrease over the same period. The company is preparing to report its fourth-quarter 2024 results after the market closes on Thursday. InvestingPro analysis indicates the stock is currently in oversold territory, with a strong current ratio of 1.81 suggesting healthy liquidity. Subscribers can access 10+ additional ProTips and comprehensive financial metrics on the platform.
JMP Securities analysts believe that the potential divestiture of the MarTech assets will benefit EverCommerce by allowing the company to reestablish a pattern of exceeding expectations and raising future guidance. They also anticipate that simplifying the company’s complex narrative, which includes numerous acquisitions and a limited float, will lead to a higher valuation multiple over time.
The strategic review of EverCommerce’s MarTech solutions is part of an effort to streamline operations and focus on core business areas. The company’s decision to exclude MarTech from its 2025 guidance indicates a clear delineation of its ongoing business from the assets earmarked for sale.
Investors and analysts will be closely monitoring EverCommerce’s upcoming earnings report for further insights into the company’s financial health and the progress of the strategic review process. The report will provide a snapshot of the company’s performance in the fourth quarter of 2024 and may offer additional details on the expected impact of the MarTech divestiture.
In other recent news, EverCommerce Inc. reported its financial results for the third quarter of 2024, showing a revenue of $176.3 million, which is a 0.9% increase year-over-year. The company also saw its adjusted EBITDA margin expand by 140 basis points. EverCommerce provided a revenue guidance range for the fourth quarter of 2024 between $168-$172 million. Additionally, EverCommerce is considering selling its Marketing Technology division as part of a strategic shift to focus more on its core SaaS offerings. The sale process is expected to conclude in 2025, and the company’s financial guidance for the fourth quarter of 2024 will exclude this segment. In corporate governance, Tanner Austin has been appointed as a new director on the company’s board following the resignation of John Marquis. EverCommerce continues to navigate the competitive landscape with these strategic and operational changes.
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