- Marzo 7, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
Informatica (INFA)
We’ll start off with Informatica, a provider of data integration software and services. The company’s data management offerings are used by clients including government organizations, financial and insurance services and telecommunication and health care companies, amongst others.
Informatica’s artificial intelligence-powered platform acts as the bridge for enterprises’ data troves, connecting across data lakes, on-premise systems, data warehouses, and front-office applications. All coalesce to give enterprises a bird’s eye view of the their application, supply chain, and multi-cloud environments’ ongoing health.
The company’s transformation to a cloud-first business was marked by its return to the public markets last October, following a 6-year hiatus. The company sold 29 million shares at $29 each, raising $841 million in the IPO. That gave the Redwood City, California-based company a valuation of $7.9 billion.
However, the timing of the IPO has coincided with the market’s sharp downturn, and it has been a brutal reintroduction to life as a public entity. The stock has seen losses of 39% since the first day’s close.
A mixed Q4 earnings report has not helped either. Revenue increased by 8% year-over-year to reach $406.7 million and beat the Street’s call by $10.16 million. However, the company missed on the bottom-line, as EPS of -$0.25 fell short of the consensus estimate by $0.12.
That said, Goldman Sachs’s Kash Rangan thinks the selloff represents a “compelling entry point,” as he believes the company’s prospects are sound.
“With Informatica re-platforming to cloud native products and pivoting to a subscription business model, we believe the company is well positioned to gain share in a large and growing TAM. In our view, the company is ahead of revenue growth acceleration amid 20%+ subscription revenue growth, improving renewal and net retention rates, and a significant maintenance conversion opportunity,” Rangan explained.
“Despite a competitive market with multiple legacy vendors, we believe Informatica has a customer and technology moat through its track record as a best-in-class data management vendor, easy to use interface, and robust integrations across all major public clouds and SaaS vendors,” the analyst summed up.
To this end, Rangan rates INFA stock a Buy and has a $46 price target for the shares, suggesting room for huge 160% growth over the coming year. (To
Rangan might be bullish but so are most of his colleagues. Since going public, 9 analysts have posted INFA reviews, which come in as 8 to 1 in favor of Buys over Holds, naturally culminating in a Strong Buy consensus rating. There are plenty of gains projected too; at $37.67, the average price target implies share appreciation of ~113% over the one-year timeframe.
