Why Are UserTesting Shares Trading Higher Today?

Analysts initiated coverage on UserTesting Inc USER, with significant upside.

  • William Blair analyst Arjun Bhatia initiated coverage with an Outperform.
  • Canaccord analyst David Hynes initiated coverage with a Buy and $15 price target (62% upside). 
  • The shares are now trading below the initial public offering price, which "creates a very interesting opportunity." 
  • He calls UserTesting a "high-conviction Buy," with the company growing in the mid-40% range. 
  • UserTesting is a video-based platform that collects the voice of the customer feedback. He sees this as a "hot category" and views the stock as "too cheap."
  • Baird analyst Rob Oliver initiated coverage with an Outperform and $15 price target. 
  • Digital transformation is driving an "explosion" in digital products, and this requires enterprises to focus on customer experience in real-time, Oliver tells. 
  • The analyst says UserTesting is the leader in video-first customer experience software with a large total addressable market.
  • Truist analyst Terry Tillman initiated coverage with a Buy and $15 price target.
  • The analyst states that the company has achieved accelerating revenue growth throughout 2020/2021 by offering "highly differentiated" customer experience narratives which help its customers capture digitally recorded video narratives from targeted, opt-in audiences. 
  • Tillman adds that he is excited about the sustained strong top-line prospects for UserTesting in what he sees as a "highly dynamic" segment.
  • Piper Sandler analyst Brent Bracelin initiated coverage with an Overweight and $15 price target. 
  • The analyst sees a favorable risk/reward profile given that the company's "unique" product features are gaining traction at some of the largest brands in the world. 
  • The company is disrupting market research with an on-demand cloud platform that records video interviews, converts them into data, analyzes, and packages them up into an easily digestible report.
  • JPMorgan analyst Mark Murphy initiated coverage with an Overweight and $14 price target (51% upside). 
  • UserTesting is the leader in customer experience narratives, shaping the market with continued innovation. 
  • The analyst sees an attractive valuation at current share levels.
  • Needham analyst Scott Berg initiated coverage with a Buy and $14 price target.
  • Raymond James analyst Brian Peterson initiated coverage with a Strong Buy and $14 price target. 
  • Peterson thinks the secular shift toward technology-enabled market research methods and customer analytics creates several new software categories.
  • Peterson believes UserTesting should be a prime beneficiary of this dynamic, given that its video-oriented platform can often provide more human insights than other data/survey-focused applications.
  • Oppenheimer analyst Brian Schwartz initiated coverage with an Outperform and $14 price target. 
  • The analyst views UserTesting as a "leading technology disruptor" and believes the stock has catalysts to support fast software-as-a-service growth for the "foreseeable future." 
  • The company's valuation is also "reasonable," which is "increasingly difficult to find in the SaaS market."
  • Morgan Stanley analyst Stan Zlotsky initiated coverage with an Overweight and $11 price target (19% upside). 
  • While the market for the company's real-time, video-based feedback to improve customer experiences is "nascent," Zlotsky sees a "large and greenfield" $29 billion total addressable market, which he sees giving UserTesting "a long runway of sustainable and profitable growth." 
  • The analyst notes that most UserTesting's new customers are greenfield wins and sees a higher need to educate prospects on the availability of digital platforms to access high-quality insights directly from customers quickly.
  • He thinks the stock's current valuation underestimates the company's opportunity.
  • Loop Capital analyst Yun Kim initiated coverage of UserTesting with a Buy rating and a $10 price target.
  • Price Action: USER shares traded higher by 10.4% at $9.25 in the market session on the last check Monday.
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