On Thursday, Benchmark has increased the price target for LiveRamp Holdings Inc. (NYSE: NYSE:RAMP) to $56, up from the previous $51, while maintaining a Buy rating on the stock. The adjustment follows LiveRamp's recent financial results, which the firm described as a "clean quarter" that surpassed fiscal fourth quarter and initial estimates for the upcoming year.
The company's guidance for fiscal year 2025 suggests an 8% to 11% year-over-year revenue growth, which Benchmark views as conservative. This outlook is especially relevant considering the potential delay of Chrome cookie deprecation to June 2025, which would fall into LiveRamp's fiscal year 2026. The provided guidance also accounts for a slowdown in growth during the second half of the year due to macroeconomic factors and uncertainties related to cookies.
Benchmark highlighted LiveRamp's operational efficiency, noting the expected year-over-year leverage increase of over 100 basis points for fiscal year 2025, driven by offshoring initiatives. With the current headcount in India anticipated to double within the year, the firm anticipates further scaling of leverage in fiscal year 2026 and beyond.
The firm also pointed out the diversification of LiveRamp's remaining performance obligations, with about half outside the consumer packaged goods (CPG) and retail sectors. This diversification indicates a significant addressable market opportunity that is being steadily tapped into.
The expansion into new verticals such as Pharmaceuticals, Travel, and Entertainment has been attributed to prior investments and a reorganization of LiveRamp's sales teams by industry vertical.
In conclusion, Benchmark's revised price target reflects a positive outlook on LiveRamp's financial performance and strategic initiatives, which are expected to drive revenue growth and operational leverage in the coming fiscal years. The firm reiterated its Buy rating on the stock, based on a Discounted Cash Flow (DCF) analysis.
InvestingPro Insights
As LiveRamp Holdings Inc. (NYSE: RAMP) navigates through its fiscal year with a positive outlook from Benchmark, recent real-time data from InvestingPro further informs potential investors. The company's market capitalization currently stands at a solid $2.14 billion, underscoring the scale of its operations. Despite a challenging macroeconomic environment, LiveRamp has maintained a gross profit margin of 72.47% over the last twelve months as of Q3 2024, showcasing the company's ability to retain a significant portion of its revenue after accounting for the cost of goods sold.
From an operational standpoint, LiveRamp's liquidity position is robust, with liquid assets exceeding its short-term obligations. This financial health is further reflected in the company's cash reserves, which surpass its debt levels, providing a cushion against market fluctuations. Additionally, analysts predict a profitable year ahead for LiveRamp, aligning with Benchmark's positive sentiment.
Investors seeking further insights can explore additional InvestingPro Tips tailored for LiveRamp, which delve into aspects such as expected net income growth and stock price volatility. With 8 more tips available on InvestingPro, users can gain a comprehensive understanding of the company's financial landscape. For those interested in a deeper analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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