For Mulesoft, The Best May Be Yet To Come; Oppenheimer Upgrades

Following meetings with the senior management at Mulesoft Inc MULE, Oppenheimer said it's incrementally positive on the company.

The Analyst

Oppenheimer analyst Ittai Kidron upgraded his rating on Mulesoft from Perform to Outperform and set a price target of $30.

The Thesis

Mulesoft has several key growth drivers in place that have yet to be fully monetized or appreciated, the analyst said in a Wednesday note. (See Kidron's track record here.) 

The company is likely to see additional leverage from its enhanced sales effort and expanding partner/channel leverage, Kidron said. 

Mulesoft has added more use-case selling to the sales deck, which could accelerate the deal pipeline build/closure rate as landing spots at customers are targeted, Kidron said.

The software company has accelerating support from channel partners, which now represent about 30 percent of deals, according to Oppenheimer.

Mulesoft has now reached a "critical mass" that's driving increased partner support, a willingness to commit/engage more aggressively and helping expansion into new customer groups and regions, Kidron said. 

The Price Action

Mulesoft shares are down about 4 percent year-to-date. The company offered 13 million shares in an IPO earlier this year priced at $17 each.

The stock clocked in a gain of 46 percent on its Wall Street debut on March 17, 2017 and has since traded in a range of $19.40 to $29.

Shares were up 0.30 percent to $23.07 in Wednesday morning trading. 

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