HashiCorp's New Features To Create Monetization Strategy: Analyst Projects Customer Upside

Piper Sandler analyst James E. Fish reiterated a Neutral rating on HashiCorp, Inc. HCP, with a price target of $30.

The analyst applauds the company's go-to-market simplification, focusing more on telling customers what they should do rather than what they could do. 

Management even hinted bundles beyond Security could be coming, Fish adds.

The analyst is also bullish about releasing features and add-ons like Stacks, Secrets Sync, and Consul Central into commercial-only (particularly Cloud), driving further differentiation against the open-source offerings.

Fish thinks this will help to create a monetization strategy that resembles other cloud / initial free tier vendors that can lead to ARR and new customer upside.

Hashi's AI capabilities include the ability to generate automatic test cases for Terraform, deployment inquiries, editorial quick fixes, and control of AI-cloud workloads / GPU usage, notes the analyst. 

Additionally, Boundary is quickly becoming a strong spear with customers as they modernize their PAM, with partners visibly enthusiastic about it, Fish writes.

The analyst notes new head of Worldwide Field Operations St. Ledger sees Hashi as past the "early adopters" phase and now in the "early majority", requiring Hashi to be more prescriptive.

The analyst remains Neutral as the strategic moves will take time to show up in fundamentals, especially as optimizations persist. Meanwhile, the analyst is encouraged by the announcements, go-to-market update, and monetization path.

Price Action: HCP shares are trading lower by 4.56% to $21.47 on the last check Thursday.