Bank of America just raised its EUR/USD forecast
On Monday, Piper Sandler analyst Clarke Jeffries revised the price target for EverCommerce Inc (NASDAQ:EVCM) to $9.00, down from the previous $11.00, while retaining a Neutral stance on the company’s stock. Currently trading at $9.36, the stock sits between analysts’ target range of $8.00 to $15.00, with InvestingPro analysis suggesting the stock may be undervalued based on its Fair Value assessment. The adjustment comes in light of EverCommerce’s recent announcement, made two days before their fourth-quarter 2024 earnings report, detailing plans for a strategic sale of their Marketing Technology (MarTech) segment in 2025.
The MarTech segment, known for providing lead generation and digital agency capabilities, contributed approximately $136.7 million in revenue and $13.3 million of EBITDA to the company’s 2024 calendar year performance. Despite the planned divestiture, EverCommerce has indicated that it expects to maintain its EBITDA for the fiscal year 2025 at a similar level to the guidance provided for fiscal year 2024. InvestingPro data shows the company maintains strong liquidity with a current ratio of 1.97, and while currently unprofitable, analysts expect positive earnings in the coming year. Get access to 7 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report. The company had previously forecasted a midpoint EBITDA of $171.5 million for 2024, and the same figure is projected for 2025, which suggests an implied margin of 29% and over 40% incremental EBITDA margins for the remaining business.
Jeffries noted that while the anticipated sale of the MarTech segment may enhance the long-term margins for EverCommerce, challenges in growth persist. According to Piper Sandler’s analysis, the guidance for fiscal year 2025 implies mid-single-digit (MSD) subscription and transaction revenue growth, despite EverCommerce ending fiscal year 2024 with around 7% pro forma customer growth.
The strategic focus for EverCommerce following the MarTech segment sale is expected to shift towards the EverPro and EverHealth segments. This realignment could potentially lead to stronger growth outcomes for the company in the coming year. Jeffries’s commentary underscores the company’s efforts to maintain financial performance while navigating a shift in strategic priorities. With a healthy gross profit margin of 67.3% and management actively buying back shares, InvestingPro rates the company’s overall financial health as "GOOD" with a score of 2.67 out of 5.
In other recent news, EverCommerce Inc. reported its fourth-quarter 2024 earnings, revealing revenue of $175 million, which exceeded the forecast of $170.52 million. However, the company reported a wider-than-expected loss per share of $0.07, compared to the anticipated loss of $0.01. The company highlighted strong growth in subscription and transaction revenue, with a full-year pro forma revenue growth of 5.7%. RBC Capital Markets adjusted its price target for EverCommerce to $11.00, down from $14.00, while maintaining an Outperform rating, citing the company’s solid end-of-year results and strategic direction. Citizens JMP reiterated a Market Outperform rating with a steady price target of $15.00, expressing confidence in the company’s strategic simplification and planned divestment of lower-quality revenue streams. EverCommerce’s decision to sell its MarTech division is seen as a strategic move to streamline operations and focus on core business growth. The company expects the sale to occur in 2025, which is anticipated to alleviate the drag on revenue growth and margins. Investors are advised to consider these developments as EverCommerce continues to execute its business model and strategic initiatives.
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