Goldman Sachs analyst Kash Rangan reiterated a Hold rating on Weave Communications (WEAV – Research Report) yesterday and set a price target of $12.00.
Kash Rangan’s rating is based on a thorough analysis of Weave Communications’ recent financial performance and projected growth. Rangan acknowledges the company’s solid fourth-quarter results, which saw revenue outperforming consensus estimates and a notable improvement in non-GAAP operating margin. Moreover, Weave Communications provided guidance for the first quarter and full year of 2024 that aligns with analysts’ expectations, indicating a consistent and stable outlook. Despite these positives and the company’s robust revenue growth in the previous fiscal year, Rangan opts for a cautious stance by maintaining a Hold rating, suggesting that while there is potential for upside, it may already be factored into the current valuation.
Additionally, Rangan finds merit in Weave Communications’ strategic focus, particularly its specialty medical segment’s rapid growth and high annual recurring revenue contribution. The company’s strong gross retention rate reinforces its value proposition, even among small to medium-sized businesses that tend to be more budget-sensitive. However, despite the flat quarterly net retention rate and expectations of positive momentum in the second half of the year, Rangan does not provide a more bullish outlook. The reference to sustained hiring in sales and marketing, which typically indicates confidence in future revenue growth, is acknowledged but does not sway the Hold rating. This careful approach underscores a recognition of Weave Communications’ solid fundamentals while also reflecting the need for additional evidence of re-acceleration in growth before considering a rating change.
Rangan covers the Technology sector, focusing on stocks such as Samsara, Adobe, and Microsoft. According to TipRanks, Rangan has an average return of 12.3% and a 62.20% success rate on recommended stocks.
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Weave Communications (WEAV) Company Description:
Weave Communications Inc is a all-in-one customer communications and engagement software platform for small and medium-sized businesses.
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