E2open Parent Holdings Inc’s ETWO shares are likely to re-rate in case SaaS (software as a service) revenue growth continues, according to BofA Securities.
The E2open Analyst: Andrew Obin upgraded the rating for E2open Parent Holdings from Buy to Neutral, while keeping the price target at $12.
The E2open Thesis: Pro forma SaaS revenue growth is expected to accelerate to 11% in fiscal 2023 (ending February) from 9.5% in fiscal 2022, Obin said in the upgrade note.
“Surveys suggest better budgets for supply chain tech in 2022 and our forecasts are below Street expectations for peers,” the analyst wrote.
“E2open acquired Logistyx, a provider of parcel and e-commerce shipping software. Offerings are complementary to E2open’s existing Transportation Management System modules,” he added.
The analyst raised the adjusted EBITDA estimates for fiscal 2023 and 2024 by $13 million to $232 million and by $18 million to $262 million, respectively. “This reflects the building of both revenue and cost synergies,” Obin added.
ETWO Price Action: Shares of E2open Parent Holdings are up 3.06% to $7.92 at the time of publication Thursday.
Photo: Syaibatul Hamdi from Pixabay
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