Needham maintains Thryv stock Buy rating, $28 target

On Monday, Needham analysts maintained a positive outlook on Thryv Holdings, Inc. (NASDAQ:THRY), reiterating their Buy rating and $28.00 price target. The firm’s analysts attended Thryv’s PartnerKon event, previously known as Keap’s partner conference, to gain insights into the company’s product strategy and the potential revenue synergies following the acquisition of Keap. Trading at $12.05, the stock has declined over 44% in the past year and appears undervalued according to InvestingPro analysis, with analyst targets ranging from $17 to $30.

During the event, it was noted that there is considerable partner optimism regarding the cross-sell and up-sell opportunities between Thryv and Keap’s platforms. This sentiment is expected to contribute to an increase in average revenue per user (ARPU), further supported by Thryv’s "Center" cross-sell initiative. With current annual revenue of $824 million and a gross profit margin of 65%, analysts observed that the acquisition has positively influenced Keap’s go-to-market (GTM) team, which could lead to revenue synergies exceeding initial projections.

The discussions at PartnerKon also centered on product enhancements aimed at empowering the partner community. A specific stock keeping unit (SKU) for Keap is in development, along with other platform improvements focused on modernization and simplification. These developments are part of a broader effort to integrate Thryv and Keap’s platforms, with a prototype currently in the works. The ultimate objective is a full merger of the two platforms. For deeper insights into Thryv’s financial health, which InvestingPro rates as FAIR, and access to exclusive ProTips, consider exploring the comprehensive Pro Research Report available to subscribers.

Needham’s reaffirmed position on Thryv Holdings comes as the company works towards integrating its services with Keap, aiming to streamline operations and drive revenue growth. The integration process is a key element in Thryv’s strategy to enhance its platform and expand its market reach.

Thryv Holdings, Inc., with its sustained efforts to modernize and simplify its platform through strategic acquisitions and partnerships, continues to show promise in the eyes of Needham analysts. The company’s focus on enabling its partner community and driving ARPU growth through cross-selling opportunities remains a pivotal aspect of its business strategy moving forward.

In other recent news, Thryv Holdings Inc. reported strong financial results for Q4 2024, with a notable 41% year-over-year increase in its SaaS revenue, reaching $104.3 million. The company also announced a significant increase in its total subscribers, growing by 73% year-over-year to 114,000. In addition to these earnings highlights, Thryv completed the acquisition of Keap, which is expected to enhance its partner channel and contribute between $75 million to $78 million in revenue for 2025. The acquisition is part of Thryv’s strategic focus on expanding its SaaS offerings and improving its financial position, demonstrated by the prepayment of $78.8 million in debt for 2024.

RBC Capital Markets recently began coverage on Thryv Holdings, assigning a "Sector Perform" rating with a price target of $17.00. The analysts highlighted Thryv’s ongoing transformation into a SaaS platform, with SaaS revenues now constituting over half of the company’s total revenue. They emphasized the importance of execution in Thryv’s business model shift and noted that sustained customer retention and growth within the SaaS segment will be crucial for the company’s future valuation. Thryv’s transition reflects the growing demand for SaaS solutions among small and medium-sized businesses, aiming to align with this evolving market landscape.

Looking ahead, Thryv projects its total SaaS revenue for 2025 to be between $464.5 million and $474 million, with SaaS expected to comprise 60% of total revenues. The company anticipates that the majority of its EBITDA will come from SaaS by 2026, signaling a strategic shift towards a SaaS-focused business model.

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