Why Grid Dynamics Shares Are Gaining Today

Grid Dynamics Holdings Inc GDYN provided a positive update on its current operations and business continuity efforts in response to the conflict in Ukraine.
Needham analyst Mayank Tandon noted the critical takeaway from the update being a higher revenue guide.
The 1Q22 outlook now called for $65 million+ in revenue, is well above the prior range of $55 million - $60 million.
The company continues to hire staff in Western Ukraine, relocate existing employees to other regions of the world, and organically add staff in Central Europe, the US, Mexico, and India.
Tandon was impressed with management's ability to quickly diversify their delivery and outperform their guidance in the face of the impact on their operations from the ongoing conflict.
Tandon raised its outlook for 1Q22, FY22, and FY23, reiterating its Buy rating and raising the price target to $25 (55.1% upside) from $22.
Tandon saw the recent sell-off as overdone, especially in light of the robust demand environment, management's aggressive efforts to shift work away from Ukraine/ramp hiring in other regions, and the company's rock-solid balance sheet.
Tandon saw the growth and margins pressured over the next few months, followed by a sharp recovery once headcount ramps in other regions and tensions eventually ease in Eastern Europe.
Price Action: GDYN shares traded higher by 5.82% at $15.92 on the last check Thursday.

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