Analysts Initiate Coverage On EverCommerce Over Its Market Opportunity Potential

Several analysts initiated coverage of EverCommerce Inc EVCM, seeing upside potential and attractive valuation.

Analyst Ratings: Jefferies analyst Samad Samana initiated coverage of EverCommerce with a Hold rating and a $19 price target, implying an 8.9% upside.

• Samana views the business favorably while cautions against the share prices reaching close to fair value for a company growing mid-teens organically.

Barclays analyst Raimo Lenschow initiated coverage with an Equal Weight rating and $19 price target. 

• Lenschow believes EverCommerce has a significant opportunity to take wallet share, but the stock already trades at 7x of 2022 estimated sales.

Raymond James analyst Brian Peterson initiated coverage with an Outperform rating and $20 price target, implying a 14.6% upside. Peterson believes EverCommerce has developed a product portfolio uniquely positioned to attack one of the last authentic remaining white space markets in software.

• He expects the company's significant new logo opportunity and cross-selling efforts to drive a normalized growth profile in the upper-teens with substantial levels of profitability.

Canaccord analyst David Hynes initiated coverage with a Buy rating and $20 price target. 

• The company focuses on aggregating the fragmented business management platforms to solve the needs of subscale software vendors who lack the operational best practices, functional depth, and go-to-market expertise required to scale beyond the single-digit millions in revenue, Hynes added.

Goldman Sachs analyst Christopher Merwin initiated coverage with a Buy rating and a $21 price target, implying a 20.3% upside. Merwin believes the company's primary verticals, home services, health, fitness, and wellness, are largely under-served by horizontal software-as-a-service vendors. 

• EverCommerce's approach provides the vertical-specific tools that businesses need to digitize their businesses. Merwin finds the stock's valuation attractive at current share levels.

RBC Capital analyst Matthew Hedberg initiated coverage with an Outperform rating and a $21 price target. Hedberg is optimistic about the company's potential to be a trusted software partner in the large, growing, and fragmented service SMB market, representing an estimated $520 billion domestic opportunity. 

• It is an acquirer of choice for service SMB, with M&A potentially moving Hedberg's expected annual 15-20% organic revenue growth rate closer to 25-30%.

Deutsche Bank analyst Bhavin Shah initiated coverage with a Buy rating and $21 price target. 

• Shah views the company as a leader in micro-vertical small- to mid-sized business software, an important market in the early innings of digital transformation.

JMP Securities analyst Patrick Walravens initiated coverage with an Outperform rating and $22 price target, implying a 26.1% upside.

• Walravens views the stock as an attractive opportunity for long-term capital appreciation as it pursues a large total addressable market estimated to be $1.3 trillion globally, with a substantial cross-sell opportunity for its payments product, PaySimple. 
• Additionally, EverCommerce's end-to-end suite of software solutions also meets the needs of service SMBs. It provides a compelling value proposition relative to the solutions currently available in this segment.

Stifel analyst Brad Reback initiated coverage with a Buy rating and a $23 price target, implying a 31.8% upside. 

• He believes shares deserve to trade closer to the range of other mid-to-high growth peers given EverCommerce's expanding small- and medium-sized business opportunity and its expanding product set within micro-verticals. 
• Reback sees the company sustain high-teens sales growth while posting increasing levels of profitability and expanding free cash flow in coming years.

Oppenheimer analyst Brian Schwartz initiated coverage with an Outperform rating and $24 price target, implying a 37.5% upside. 

• Schwartz is confident in Evercommerce's multi-year growth potential and is attracted to the large market and greenfield opportunities it addresses.

Piper Sandler analyst Brent Bracelin initiated coverage with an Overweight rating and a $24 price target. 

• Bracelin sees a favorable risk/reward given attractive upside potential, assuming management can execute an ambitious vision to build a global software franchise within three professional services verticals.

Evercore ISI analyst Kirk Materne initiated coverage with an Outperform rating and a $24 price target. Materne views the company as an exciting way to gain exposure to the digitization of the large and growing small-to-mid-sized business service economy. 

• It is the only pure-play business management software provider that operates in the home services, health services, and wellness services vertical markets, Materne noted.

Price action: EVCM shares traded higher by 1.66% at $17.74 in the premarket session on the last check Monday.

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