Sapiens (SPNS – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Mayank Tandon from Needham reiterated a Buy rating on the stock and has a $35.00 price target.
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Mayank Tandon has given his Buy rating due to a combination of factors including Sapiens International Corp.’s strategic shift towards high-margin SaaS revenue, which is enhancing their profit margins. Despite a modest year-over-year growth of 1.4% in the first quarter due to currency fluctuations, the company has adjusted its fiscal year 2025 growth guidance upwards, largely driven by recent acquisitions.
These acquisitions, while initially impacting margins negatively by 170 basis points, are expected to become beneficial by fiscal year 2027. The company’s annual recurring revenue has shown a robust increase of 11.8% year-over-year, with SaaS and recurring revenue growing by 14.7% year-over-year. With the stock trading at a favorable FY26 EV/EBITDA multiple of approximately 13x, Tandon views the risk-reward profile as attractive for long-term investors, thereby supporting the Buy rating.