WalkMe Walking Towards Solid Growth via Partnerships

The Israel-based company WalkMe (NASDAQ:WKME) is a major developer of digital adoption solutions. It has carved out a place for itself in the Software as a Service (SaaS) market.

The company offers a cloud-based code-free digital adoption platform (DAP) that provides users with in-software instructions to help them achieve their digital transformation goals. The company’s products save support center expenses while also improving the end user’s experience and productivity.

WalkMe, which was founded in 2012, went public on June 15 and began trading on the NASDAQ on June 16.

With a market capitalization of $1.6 billion, WalkMe stock has lost about 35% of its value since its IPO.

Q3 Numbers and Strong Q4 Outlook

The firm released its third-quarter results on November 10, its second earnings release as a public company. Total revenue increased by 31% year-over-year to $50.6 million.

The revenues for the Subscription segment accelerated 37% year-over-year to $46.1 million, while Professional services revenue fell by 11.6% from the year-ago quarter.

In the meantime, non-GAAP net loss increased to $0.13 per share from $0.09 in the prior quarter.

WalkMe forecasts sales to be in the double digits in the fourth quarter, with revenues ranging from $51.5 to $52.5 million, reflecting a 32% to 35% year-over-year increase.

Partnerships to Drive Growth

WalkMe is forming new partnerships to expand its footprint in the digital world.

Last month, WalkMe teamed up with Deloitte, a global system integrator, to help the latter launch a new Digital Adoption Services business. The goal is to provide clients with technology adoption solutions so that businesses may take advantage of these services and achieve the speedy outcomes that digital transformation strategies can provide.

As part of yet another collaboration, this one with SAP Concur, WalkMe has joined the SAP Concur partner program to deliver a solution extension called Concur User Assistant by WalkMe. SAP Concur is a platform for integrated travel, expense, and invoice management. The new solution extension employs WalkMe technology to provide relevant self-service help and information to boost digital adoption.

Dan Adika, CEO of WalkMe, remains upbeat about the benefits of new collaborations.

He said, “I’m proud of what we achieved during the quarter, including signing new partnerships with Deloitte U.S. and SAP Concur. These agreements underscore the need for a digital adoption platform by enterprises driving digital transformation in their businesses.”

He further added, “We are in the very early stages of a large opportunity and believe that we are well-positioned to capitalize on the market for Digital Adoption as we continue to invest for future growth.”

These partnerships should help the company fortify its position in the nascent Digital Adoption Platform space, which has the potential to grow into a major end market over time.

Website Traffic Details

WalkMe’s website visits have been growing, according to statistics from TipRanks’ WalkMe Website Traffic tool. The website traffic tool calculated the company’s website traffic volume using data from Semrush (SEMR).

The number of unique visits to WalkMe’s website climbed 17.8% in the third quarter. During the same time period, the stock price increased by 1.7%.

Furthermore, we discovered that visits to the company’s website climbed by 5.4% in November compared to October.

These data show that WalkMe’s digital adoption solutions are progressively gaining momentum among enterprises, indicating a promising future for the company.

Wall Street’s Take

Turning to Wall Street, the stock has a Strong Buy consensus rating, based on 5 unanimous Buys assigned in the past three months. As for the price target, the average WKME price target stands at $36.80. This implies about 95% upside potential from the current levels.

Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.