Analysts Downgrade Rating On Qualtrics Post Takeover Deal; View Competing Bid At Higher Price Unlikely

Raymond James analyst Brian Peterson downgrades Qualtrics International Inc XM from Outperform to Market Perform.
Silver Lake and CPP Investment agreed to take over Qualtrics for ~$12.5 billion cash at $18.15 per share.
The takeout price represents a 74% premium to the unadjusted share price preceding SAP SE's SAP announcement on January 26 that it was exploring the sale of its stake in Qualtrics.
Peterson believes the takeout multiple at 7x CY23 revenue represents a fair takeout transaction when comparing comparable and recent transactions.
Given the low appetite for M&A from potential strategic buyers, the analyst also views a competing bid at a higher price as unlikely.
The deal will likely close in the second half of 2023, and shares currently trade at a 3% discount to the proposed takeout price.
JMP Securities analyst Patrick Walravens downgrades Qualtrics from Market Outperform to Market Perform.
While the analyst continues to like Qualtrics as he believes it offers an excellent product set for experience management and addresses a large TAM that the company estimates to be ~ $60 billion, he views the odds of a superior proposal to be low given the no-shop clause in the Merger Agreement and see shares as fairly valued.
Walravens maintains his 2023 non-GAAP EPS estimate of $0.22 (consensus $0.22) on revenue growth of 14% and 2024 non-GAAP EPS estimate of $0.34 (consensus $0.31) on revenue growth of 14%.
Piper Sandler analyst Brent Bracelin downgrades Qualtrics from Overweight to Neutral with an $18.15 price target.
Price Action: XM shares traded lower by 0.17% at $17.64 on the last check Tuesday.
Photo Via Wikimedia Commons

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Analysts Downgrade Rating On Qualtrics Post Takeover Deal; View Competing Bid At Higher Price Unlikely

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