2024-02-07 12:33:10
share price similrv Too attractive to ignore, according to the Jefferies investment bank. The bank returns to review the stock with a “buy” recommendation and a target price of $10, which is 70% higher than the stock price on the Nasdaq.
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The software company Similrave, under the management of the founder Or Ofer, has developed a platform for measuring, examining and predicting the behavior of Internet surfers and thus providing customers with information that helps them, for example, in marketing and sales. It was first issued on Nasdaq in the record year of technology 2021 at a value of $1.6 billion, and like most technology companies that were issued that year, lost a significant portion of its value and is currently trading at a value of $458 million after a 73% drop in the share price since the issue.
Despite the competition, Jefferies believes that Similerv will attract large customers
Jefferies economists estimate that the company’s economic fundamentals have stabilized, and after launching a new version of the platform and adopting a modular pricing strategy, they expect a renewed acceleration in the company’s revenue growth in 2024. According to them, “the sales processes are no longer prolonged and it seems that we are already close to the bottom”.
Jefferies mentions that Similerve presented for the first time in the third quarter of 2023 an operating profit (Non-GAAP) compared to operating losses previously. “We believe that the company is entering a new phase of profitable growth,” they write. In their estimation, the free flow will become positive this year.
“Although Similarweb operates in a very competitive market, it provides information and insights on a scale that is difficult to imitate,” Jefferies economists write, and estimate that it will be able to continue to attract large customers despite the challenging environment. In their estimation, the company will be able to achieve an average annual growth (CAGR) of 18% in the years 2023-2026.
Let’s recall that in 2022-2023 Similrave carried out two rounds of layoffs, in the first it said goodbye to 120 employees who made up 10% of its workforce and in the second it fired another 60 employees. Similrov is expected to release its financial statements for the fourth quarter of 2023 and the full year next week. According to the company’s forecast, revenues will reach 216.8-217.3 million dollars, a growth of about 12% compared to 2022. The forecast is for a Non-GAAP annual operating loss of 8.6-9.1 million dollars, but beyond a positive free flow in the last quarter of the year.
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