Analysts Patrick Walravens and Mathew Spencer of JMP maintain their Market Outperform rating on the stock while bumping the target price on the shares to $121 from $100 compared to the current $109 offer from Oracle.
Reasons For Boost In Offer
The analysts believe the price for NetSuite will likely increase for a few reasons:
- The offer is being subject to the approval of a majority of the "disinterested shares," of which there are 49 percent of the shares outstanding.
- One institutional shareholder already publicly stated that "at the current offer price, it would prefer to see NetSuite remain independent."
- It is in the firm's opinion that the NetSuite sales process did not "effectively canvas the market" as is required under Delaware law when there is only a single offer.
- The analysts believe NetSuite is a "unique and highly-strategic asset" that merits a "premium" takeout valuation multiple.
Valuation
The analysts noted that NetSuite currently trades at a 2017 EV/revenue multiple of 7.7x, and the firm's new $121 price target implies a multiple of 8.6x, which is the average of multiples paid for recent market purchases of SuccessFactors and Concur.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.