On Thursday, BMO Capital Markets adjusted its outlook on shares of Procore Technologies , Inc. (NYSE:PCOR), a company specializing in construction software, by increasing its price target from $85.00 to $90.00. The firm maintained its Outperform rating on the stock, suggesting continued confidence in the company's performance.
According to InvestingPro data, the stock is currently trading near its 52-week high, with a market capitalization of $12.07 billion. Analysis suggests the stock is trading above its Fair Value, joining other technology companies on the most overvalued stocks list.
The revision in the price target follows Procore's recent investor day, after which feedback on the stock has been largely positive. The analyst highlighted the company's long-term margin aspirations, which aim to align with the best in the vertical software sector. InvestingPro data reveals the company already maintains impressive gross profit margins of 82.36%, with revenue growing at 24.4% year-over-year.
InvestingPro subscribers can access 10+ additional insights about Procore's financial health and growth prospects. Procore's new go-to-market strategies, particularly in the first half of 2025, are seen as pivotal for the stock's trajectory. However, it was noted that it is too early to determine the success rate and impact of these strategies with certainty.
BMO Capital Markets expressed its view that Procore remains a long-term winner in the construction market. The potential for a cyclical upswing is anticipated to accelerate the company's growth over the medium term.
Despite the raised price target, BMO has made no changes to its earnings estimates for Procore. While the company is not currently profitable, InvestingPro analysis shows 12 analysts have revised their earnings upwards, expecting profitability this year.
The analyst's statement underscored the rationale behind the revised price target, "We continue to see the company as a long-term winner in the construction market with potential cyclical upswing accelerating growth over the medium-term." The increase to $90 reflects higher peer multiples, which suggests that Procore's stock is performing well in comparison to similar companies within the industry.
Procore Technologies has been receiving attention for its strategic initiatives and market position, and with the updated price target, BMO Capital Markets signals its belief in the company's value proposition and future prospects.
In other recent news, Procore Technologies has seen a flurry of analyst activity. Baird has upgraded its price target from $87 to $96, maintaining an Outperform rating, while UBS initiated coverage with a Buy rating and a $105 price target. Mizuho (NYSE:MFG), DA Davidson, TD Cowen, Piper Sandler, and Jefferies also revised their price targets upwards, reflecting their confidence in Procore's growth prospects.
The company's Q3 2024 revenue surged by 19%, reaching $296 million, alongside a 26% increase in international earnings. Furthermore, Procore's fiscal year 2025 revenue is projected to reach $1.275 billion, marking an 11% growth rate. This comes alongside the company's announcement of a $300 million stock buyback program.
In governance news, Procore recently adopted new amended and restated bylaws to align with recent amendments to the Delaware General Corporation Law.
These changes aim to streamline certain corporate governance processes, including modifications to the procedures and rules related to shareholder meetings, nominations of directors, and submissions of proposals for other business at shareholder meetings. These are the recent developments that have shaped Procore Technologies' strategic and financial outlook.
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