Model N, Inc. (MODN) caters to life sciences and high-tech companies through its integrated cloud solution. Its pricing automation, incentive, and contract decision solutions help customers scale their businesses profitably and drive revenue.
The upcoming earnings for the company’s first-quarter fiscal 2022 are expected on February 8. Analysts expect the company to report earnings per share of $0.08, compared to earnings per share of $0.16 in the year-ago period.
In Q4, MODN generated revenue of $51.5 million, registering a year-over-year growth of 24.2%. The figure was ahead of estimates by $431,500. Earnings per share at $0.18 were better than estimates by $0.08.
With these developments in mind, let us take a look at the changes in MODN’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Model N’s top risk category is Finance & Corporate, contributing 48% to the total 85 risks identified. In its recent annual report, the company has added three key risk factors.
According to MODN, various laws and regulations across different jurisdictions impose license and registration requirements on companies engaged in money transmissions. There is no assurance that MODN will be able to obtain any required licenses. Furthermore, even if the company does receive such licenses, it may have to incur significant costs and make potential product changes to maintain such licenses.
The company highlighted that it is required to comply with anti-money laundering laws and regulations. Despite the compliance systems it has put in place, MODN may become the target of illegal or other improper transaction settlements.
The company also acknowledged that it relies on third parties and their systems to manage its operations and services. Any failure by these third parties could adversely affect MODN.
Compared to a sector average of 18%, MODN’s Legal & Regulatory risk factor is at 12%.
Wall Street’s Take
Recently, J.P. Morgan analyst Jackson Ader upgraded the stock to a Buy from Hold rating, alongside a price target of $38 (36.3% upside potential).
Wall Street’s top analysts have a Strong Buy Consensus rating on MODN based on 5 unanimous Buys. The average Model N price target of $46.20 implies a potential upside of 65.8%. However, MODN shares have witnessed a 27.8% drop over the past 12 months.
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