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Investing.com - Stifel has lowered its price target on PROS Holdings (NYSE:PRO) to $20.00 from $24.00 while maintaining a Buy rating on the stock. According to InvestingPro data, analysts’ targets for PRO range from $18 to $36, with the stock currently trading at $16.36, suggesting significant upside potential.
The adjustment comes as PROS prepares to report quarterly results on August 5th, which will be the first earnings report under new CEO Jeff Cotten, who has been in the position for a brief period. While the company has faced challenges with a -38.7% return over the past year, InvestingPro analysis suggests the company is currently undervalued, with several positive indicators pointing to potential growth.
Stifel noted that Cotten has already made significant organizational changes, including the July 1st departure of the company’s Chief Revenue Officer and elimination of that role entirely.
According to Stifel, the new CEO appears to be focusing on accelerating expansion within existing customers and improving sales execution through better alignment with the company’s partner and alliance ecosystem.
While acknowledging it’s too early to evaluate the impact of the CEO transition, Stifel highlighted that at 2.2x enterprise value to revenue, expectations are relatively low, suggesting that even modest top-line acceleration could positively impact the stock.
In other recent news, PROS Holdings has issued $235 million in convertible senior notes due 2030, with an interest rate of 2.50% per annum. The company plans to use the net proceeds of approximately $48.8 million, after expenses, for capped call transactions to mitigate potential dilution. Additionally, PROS Holdings has refinanced a portion of its 2.25% convertible notes due 2027, exchanging $186.9 million of these notes for $185 million in newly issued 2.50% notes due 2030. Needham has reiterated its Buy rating for PROS Holdings, maintaining a $25.00 price target, citing the refinancing as a strategic move for capital flexibility. On the other hand, Baird downgraded the company from Outperform to Neutral due to execution concerns following leadership changes. Despite these concerns, PROS Holdings has reaffirmed its second-quarter 2025 guidance, projecting total revenue of $87-$88 million and subscription revenue of $72-$72.5 million. The company also plans to host an investor Q&A session, featuring its CEO and CFO, to further engage with stakeholders. This series of developments reflects ongoing strategic adjustments as PROS Holdings navigates market conditions and internal transitions.
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