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On Wednesday, KeyBanc Capital Markets made adjustments to its outlook on Bentley Systems Inc . (NASDAQ:BSY), reducing the price target to $54.00 from the previous $63.00. Despite this change, the firm maintained its Overweight rating on the company’s shares. According to InvestingPro data, the stock currently trades at $42.62, with multiple valuation metrics suggesting premium pricing relative to peers. InvestingPro analysis indicates the stock is trading near its Fair Value, with 8 additional key insights available to subscribers. KeyBanc analyst Jason Celino provided insights on the decision, noting a positive stance on the first quarter constant currency Annual Recurring Revenue (ARR), which is projected to lean towards KeyBanc’s above-consensus estimate.
Celino expressed confidence in the resilience of infrastructure engineering spending compared to other markets. He also anticipated that Bentley Systems might reaffirm its 2025 constant currency ARR growth guidance, which is set at 10.5-12.5%. This outlook aligns with the company’s impressive track record, as InvestingPro data shows revenue growth of 10.15% over the last twelve months, supported by robust gross profit margins of 81.03%. Additionally, Celino expects the company to share qualitative comments on the impact of foreign exchange fluctuations on its reported results, considering the recent volatility in currency markets.
Bentley Systems’ long-term growth strategy and consistent operating margin (OM) expansion to 35-40% were highlighted as factors justifying a premium valuation relative to its industrial software peers. The rationale behind the lowered price target was attributed to a recalibration at 40 times the 2026 estimated enterprise value to free cash flow (EV/FCF), reflecting the broader pullback in valuation multiples that has been observed recently. InvestingPro’s comprehensive analysis rates the company’s overall financial health as GOOD, with particularly strong scores in profitability metrics. For deeper insights, investors can access the detailed Pro Research Report, available for BSY and 1,400+ other top US stocks.
The Overweight rating reflects KeyBanc’s continued positive outlook on Bentley Systems’ stock, suggesting that the shares could outperform the average total return of the stocks covered by the analyst in the sector over the next 6 to 12 months. The new price target of $54.00 represents KeyBanc’s adjusted expectation for the stock’s future performance based on their analysis.
In other recent news, Bentley Systems reported its Q4 2024 earnings, revealing an earnings per share (EPS) of $0.21, slightly below the forecasted $0.22. The company’s revenue also missed expectations, coming in at $349.8 million against a forecast of $351.35 million. Despite these misses, Bentley’s revenue grew 13% year-over-year, driven by a 16% increase in subscription services. In a strategic move, Bentley Systems has incorporated Google (NASDAQ:GOOGL) Maps Platform’s Imagery Insights into its Blyncsy product, enhancing its road inspection capabilities with AI technology. This collaboration aims to improve infrastructure monitoring and maintenance, especially in disaster recovery scenarios.
Analyst actions have followed these developments, with Goldman Sachs downgrading Bentley Systems from Neutral to Sell, adjusting the price target from $51 to $42. The downgrade reflects a recalibration of expectations following Bentley’s financial results and future guidance, particularly due to challenges in the China market. Oppenheimer also downgraded Bentley’s stock to Perform from Outperform, citing the difficulty in identifying catalysts for growth in a competitive AI market. Despite these downgrades, Bentley continues to focus on expanding its AI-powered solutions, including the launch of OpenSight Plus, its first AI-powered infrastructure engineering application. These recent developments highlight Bentley’s efforts to innovate and adapt within the infrastructure software industry amidst varying market conditions.
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