PowerSchool short report ‘overly pessimistic,’ says Raymond James

Raymond James analyst Brian Peterson says Spruce Point short report on PowerSchool “paints an overly pessimistic stance” on the company’s fundamentals. While federal grade K-12 IT budgets mat come down as federal funding gets scaled back after 2024, the vast majority of the school funding comes from state and local sources, the analyst tells investors in a research note. The firm expects PowerSchool to outgrow overall K-12 software spending for the foreseeable future. Raymond James believes the stock’s valuation “does not paint a case of material multiple compression.” It keeps an Outperform rating on the shares.