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MeridianLink Delivers Mixed Q2 Results; Shares Rise

MeridianLink, Inc. (MLNK) shares jumped almost 1.5% in Tuesday’s extended trading session, after the company reported mixed debut Q2 results since its listing in July.

Markedly, shares of the leading provider of cloud-based software solutions for financial institutions have gained 15.7% since its IPO on July 28. (See MeridianLink stock charts on TipRanks)

Revenues jumped 38% year-over-year to $68.5 million. The increase in revenues reflected a surge in subscription fees, which increased to $60.4 million, and strong growth in professional services, which grew to $5.6 million.

However, the company reported an adjusted loss of $0.03 per share, an improvement over the reported loss of $0.07 per share in the prior-year period.

Adjusted operating margin declined 200 bps to 30%, while adjusted net income margin improved 100 bps to 13%.

MeridianLink Issues Q3 and FY2021 Outlook

Based on strong Q2 results, the company issued guidance for the third quarter and full-year 2021. For FY2021, the company forecasts revenues to be in the range of $256.7 to $257.9 million. Furthermore, the company forecasts adjusted EBITDA to be in the range of $112.3 million to $113.5 million.

For Q3, the company expects revenue to range between $62.9 million and $63.5 million. On top of this, the company predicts an adjusted EBITDA range of $25.0 million to $25.6 million.

Following the Q2 results and updated annual guidance, Barclays analyst Saket Kalia increased his target price from $30 to $33 (16% upside potential), and reiterated a Hold rating on the stock.

Overall, the stock has a Moderate Buy consensus rating, based on six Buys and four Holds. The average MeridianLink price target of $29.89 implies 5% upside potential from current levels.

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