Piper Sandler downgrades AvidXchange to Neutral on valuation, falling rates

As previously reported, Piper Sandler analyst Brent Bracelin downgraded AvidXchange to Neutral from Overweight with a price target of $13, up from $12, given valuation and as falling rates create a float drag. The firm notes AvidXchange’s shares are within 5% of its new $13 price target. Nonetheless, Piper enters 2024 with a higher degree of optimism for application software based on stabilizing demand fundamentals after two years of moderation, a declining interest rate backdrop sparking greater appetite for growth stocks, new secular tailwinds for cloud and data driven by a generational shift to AI, CIO survey optimism showing accelerating cloud and AI spending intentions, and favorable risk-reward scenarios on 2025 metrics.