S&P 500 may face selling pressure as systematic funds reach full exposure
On Wednesday, Ladenburg Thalmann showed increased confidence in Synchronoss Technologies (NASDAQ:SNCR) shares, with the firm raising the stock's price target to $40.00 from $35.00 while maintaining a Buy rating. The adjustment comes amid a positive outlook on the company's Cloud segment and its potential for consistent revenue growth.
The company's focus on the Cloud segment has led to newly visible year-over-year revenue growth, which supports Ladenburg Thalmann's optimism about Synchronoss Technologies' ability to generate predictable, recurring revenues. The management team at Synchronoss is guiding for double-digit revenue growth within the next two to three years, further bolstering the firm's confidence in the stock.
Ladenburg Thalmann's analysis suggests that the current share price of Synchronoss Technologies does not fully reflect the company's intrinsic value. The firm believes a more accurate valuation would be based on a multiple of the expected non-GAAP cash earnings for the year 2025, applying a P/E multiple of 15x. This multiple is chosen to reflect the more predictable nature of the company's revenue streams.
The valuation model used by Ladenburg Thalmann involves discounting the projected earnings back to the present at a rate of 25%. With an estimate for 2025 non-GAAP cash earnings of $3.33 per share, this approach results in a fair value of $40.00 for Synchronoss Technologies. Consequently, the firm has reiterated its Buy rating and increased the 12-month price target to the new $40.00 level.
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