The general sell-off in the market due to macroeconomic and geopolitical concerns have weighed on the shares of EverCommerce (NASDAQ:EVCM).
Notably, shares of this software company have declined by 30% in the past six months. Moreover, it is down about 20% this year.
TipRanks’ Stock Investors tool shows that investors currently have a negative outlook on EVCM stock. Per the data, 18.9% of investors that hold portfolios on TipRanks have reduced their exposure to EVCM stock in the past 30 days.
Meanwhile, hedge funds have also been selling EVCM stock. Per TipRanks’ Hedge Fund Trading Activity tool, hedge funds offloaded 100K EVCM shares last quarter.
Now What?
While its stock witnessed a pullback in price, EverCommerce continues to deliver strong financial performance and provided better-than-expected FY22 guidance.
It recently announced its Q4 financials, wherein revenues of $135.6 million came in ahead of the Street’s estimates of $130.4 million and increased 47% year-over-year. Moreover, adjusted EBITDA of $29.3 million exceeded the consensus estimate of $27.5 million.
Looking ahead, EverCommerce expects revenues to be in the range of $619 million to $625 million for FY22. This compares favorably to the consensus estimate of $596 million.
Oppenheimer analyst Brian Schwartz termed EVCM’s Q4 results “very solid” and sees strong arbitrage opportunities. Schwartz stated, “We also see
good arbitrage opportunities with EVCM since investors are giving the payments and acquisitions little to no credit in the company valuation.”
He added, “We are confident in EverCommerce’s multi-year growth potential, and attracted to the large market and greenfield opportunities
it addresses (i.e., automating SMB vertical workflows).”
Schwartz expects EverCommerce to deliver solid “top-line growth and high EBITDA margins” over the next decade.
Along with Schwartz, Brad Zelnick of Deutsche Bank remains upbeat on EVCM’s prospects. However, he lowered his price target to $16 from $18, citing a tempering of sales growth enthusiasm as a result of the pace of EverCommerce’s investments.
Nevertheless, he finds EVCM’s risk/reward attractive and maintained his Buy recommendation based on the company’s growth opportunities and current valuation.
Overall, EverCommerce sports a Strong Buy consensus rating on TipRanks based on 7 Buy and 2 Hold recommendations. Moreover, the average EverCommerce price target of $18 implies 42.9 % upside potential to current levels.
Conclusion
EverCommerce stated that it is well-positioned to benefit from the ongoing digital transformation of service-based SMBs (small and medium-sized businesses).
Further, its continued investments in driving scale and growth, large and diversified customer base (617,000 customers at the end of Q4), high net retention rate (100%), and expansion of average revenue per user are positive catalysts moving forward.
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