Procore Technologies stock target cut, maintains Buy rating ahead of Q2 results

Published 08/07/2024, 16:42
Procore Technologies stock target cut, maintains Buy rating ahead of Q2 results

On Monday, Stifel adjusted its outlook on shares of Procore Technologies , Inc (NYSE:PCOR), reducing the price target to $85 from the previous $90, while still holding to a Buy rating for the company's stock. The adjustment comes ahead of the expected second-quarter 2024 results announcement by Procore, which is anticipated to occur between late July and early August, although a specific date has not yet been established.

The firm's analysis suggests that despite the current unpredictable economic indicators, Procore's traditionally cautious approach to forecasting may lead to better-than-expected financial results and potentially a reaffirmed or slightly increased guidance.

Still, it is important to note that the company has indicated that the frequency and magnitude of exceeding and raising expectations are likely to be less pronounced this year compared to the previous one.

Stifel revised its projections after a more detailed review of its financial model, which followed a non-deal roadshow (NDR) with Procore's CEO in May. The new forecast takes into account a mixed economic environment and an anticipated year-over-year growth in the company's calculated remaining performance obligations (cRPO) for the fourth quarter of 2024 in the high teens.

Consequently, the firm has lowered its year-over-year growth forecast for Procore's fiscal year 2025 revenue to 17% from the previously expected 20%, which is also below the consensus estimates of 19.7%.

While Stifel acknowledges the possibility that Procore could ultimately achieve over 20% growth in fiscal year 2025, the firm does not anticipate the initial guidance to begin with a growth rate starting with the number two. The revised price target reflects these updated expectations and assessments of the company's fiscal outlook.

In other recent news, Procore Technologies has seen a flurry of activity from various analyst firms. TD Cowen maintained its Buy rating on Procore, citing the company's strong position in a construction industry undergoing digital transformation. The firm expects Procore to achieve over 20% growth by 2025, bolstered by the inclusion of artificial intelligence insulation in its offerings.

BMO Capital also maintained its Outperform rating on Procore, despite a challenging bookings environment in the construction industry. Meanwhile, Mizuho Securities downgraded Procore's stock to Neutral from Buy, citing short-term weakness in the construction sector.

Procore reported a 26% year-over-year increase in revenue to $269 million in the first quarter, with international revenue growing by 32%. The company projects Q2 revenue between $274 million and $276 million, and full-year revenue between $1.14 billion and $1.144 billion.

Despite a 4% workforce reduction, Procore's focus remains on its core project management platform and potential for expansion among general contractors and owners.

These are recent developments, reflecting ongoing adjustments in response to Procore's performance and broader market dynamics. The firm's strategy revolves around capitalizing on easing competitive comparisons, maintaining stable renewal trends, and pushing forward with its enterprise strategy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.