On Thursday, Baird updated its outlook on shares of Procore Technologies , Inc (NYSE:PCOR), increasing the price target to $96 from the previous $87 while retaining an Outperform rating on the stock.
Currently trading at $81.17 and near its 52-week high of $86.67, Procore has demonstrated strong momentum with a 38.47% return over the past year. The firm anticipates Procore to be a top idea ahead of the company's 2025 outlook, citing several factors that contribute to its positive stance.
The analyst at Baird highlighted that Procore's investment case includes elements that are often associated with top-performing stocks. Supporting this view, InvestingPro data shows that 12 analysts have recently revised their earnings estimates upward, while the company maintains impressive gross profit margins of 82.36%.
These elements include the potential for upward revisions in estimates, with the firm believing that the FY25 outlook is set conservatively low and should provide room for upward adjustments.
Furthermore, Baird expects Procore to experience accelerating growth in the following fiscal year (FY26), which should surpass the growth seen in FY25. This projection is based on the company's current trajectory and market conditions.
The valuation of Procore is also noted to not be an extreme outlier when compared to the sector. With revenue growth of 24.4% in the last twelve months and a market capitalization of $12.07 billion, Baird suggests that there is room for improvement in the stock's valuation, especially if the company's estimates rise as expected.
The new price target of $96 is backed by the projected return of mid-teens or higher growth, which has recently supported a re-rating of the stock to approximately 10 times Revenue. For deeper insights into Procore's valuation and 10+ additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
Baird's outlook for Procore is optimistic, with the firm expressing confidence in the company's ability to outperform and justify the elevated price target through sustained growth and appropriate valuation in the market.
In other recent news, Procore Technologies has adopted new amended and restated bylaws, aligning with recent amendments to the Delaware General Corporation Law. These changes, which aim to streamline certain corporate governance processes, include modifications to the procedures and rules related to shareholder meetings, nominations of directors, and submissions of proposals for other business at shareholder meetings.
Procore has also seen robust financial performance, reporting a 19% increase in Q3 2024 revenue, reaching $296 million, alongside a 26% rise in international earnings.
Additionally, several analyst firms have revised their price targets for Procore. UBS initiated coverage with a Buy rating, predicting a 16% increase in growth for the coming year. DA Davidson and Mizuho (NYSE:MFG) maintained a neutral rating on Procore shares, but raised the target from $60.00 to $70.00 and $55 to $65 respectively. BMO Capital Markets and TD Cowen have maintained positive ratings, raising their price targets to $85 and $82, respectively.
As part of its strategic plan, Procore aims to reaccelerate growth, with FY 2025 revenue projected to reach $1.275 billion, marking an 11% growth rate. The company has also announced a $300 million stock buyback program. These are recent developments that highlight the company's robust growth prospects and strategic initiatives.
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