Robert W. Baird analyst Robert Oliver has maintained their neutral stance on AMPL stock, giving a Hold rating on November 8.
Robert Oliver’s Hold rating on Amplitude stems from a variety of factors. Primarily, he has noted the company’s solid fiscal performance, with its third-quarter revenue and earnings per share (EPS) slightly surpassing both consensus expectations and the company’s own guidance. Additionally, he appreciates Amplitude’s strategy to drive Product-led Growth (PLG) and consolidate market share. However, the visibility of the company’s performance might stay limited until the second quarter of 2024 due to a large number of enterprise renewals. Despite Amplitude’s shares trading at a low valuation compared to its normalized top-line growth rate, Oliver prefers to maintain a Hold rating until he gains better visibility into the company’s 2024 revenue and Annual Recurring Revenue (ARR) trends.
Furthermore, Oliver’s rating is influenced by the company’s customer metrics, calculated billings, and non-GAAP operating profit, which all showed positive trends. The total revenue growth was 14.6% year-over-year as reported versus the consensus of 13.7%. The company’s dollar-based net retention was 99% against last quarter’s 101%. The total customers increased by 29% year-over-year. However, the company’s gross retention was in the mid-80s during the quarter, and the churn remained relatively high. The company also faced ongoing downsell pressure from customers with contract renewals which could impact the implied ARR growth for 2024, projected to be less than 10% year-over-year. Despite these factors, Oliver decided on a Hold rating as he anticipates a clearer picture by the second quarter of 2024.
In another report released on November 8, D.A. Davidson also maintained a Hold rating on the stock with a $12.00 price target.
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Amplitude (AMPL) Company Description:
Amplitude Inc is pioneering a new category of software called digital optimization. The company’s digital optimization system serves as the command center for businesses to connect digital products to business outcomes.
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