Barclays Reiterates Equal Weight On Duck Creek Technologies, Lowers Price Target

  • Barclays analyst Saket Kalia reiterated an Equal Weight rating on Duck Creek Technologies Inc's DCT following the Q3 results.
  • He reduced the price target from $49 to $43. The new price target implies a 4.3% upside at the current level.
  • DCT beat the revenue consensus by 6.5% at $67.9 million, up 26% year-on-year. It hit the EPS consensus by 400% at $0.03.
  • Subscription revenue rose 56% Y/Y to $33.6 million, Services revenue grew 6% Y/Y to $25.6 million, License revenue increased 15% Y/Y to $2.5 million, and Maintenance revenue grew 4% Y/Y to $6.3 million. 
  • SaaS annual recurring revenue rose 64% Y/Y to $124.1 million. 
  • The gross margin expanded 252 basis points to 59.2%.
  • The legacy contract roll-off happened as expected, Kalia's research note stated. It created a $6 million $8 million headwind on subscription on top of the quarter's lower net new annual recurring revenue.
  • Price action: DCT shares traded lower by 2.77% at $40.07 on the last check Friday.
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