Bank of America Securities analyst Koji Ikeda maintained a Sell rating on Everbridge (EVBG – Research Report) today and set a price target of $22.00.
Koji Ikeda has assigned a Sell rating to Everbridge’s stock due to a number of considerations that suggest potential challenges ahead for the company. While management has expressed confidence in achieving the Rule-of-40 by 2027, with aims for approximately 15% revenue growth and 25% EBITDA margins, the path to these targets hinges on a number of growth levers. These include acquiring new logos, increasing average selling prices, and more efficient cross/up-selling within their existing customer base. It is this reliance on executing a profitable growth strategy, while moving away from the former growth-at-all-costs approach, that forms part of the rationale behind the Sell rating.
Ikeda also points to the current macroeconomic environment impacting customer buying behavior, with clients now purchasing seats just-in-time rather than in excess as a precaution for future growth. Although this cautious approach has not resulted from discounting or a decrease in cost per seat—indicating that Everbridge’s market positioning remains strong—it has led to a significant decline in average selling prices. Furthermore, the potential for further reductions in headcount amidst deteriorating demand conditions, and the assumption that M&A activity might be a focus only by 2025, suggests that near-term growth could be subdued, justifying the Sell rating and the price objective set at $22, below the current trading price.
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Everbridge (EVBG) Company Description:
Everbridge, Inc. engages in the development of software solutions for critical event management and enterprise safety applications that automate and accelerate an organization’s operational response to critical events. Its SaaS-based CEM platform enables customers to aggregate and assess threat data, locate people at risk and responders able to assist, automate the execution of pre-defined communications processes, and track progress on executing response plans. The company was founded by Cinta Putra and Steve Kirchmeier in 2002 and is headquartered in Burlington, MA.
Read More on EVBG:
- Everbridge price target lowered to $20 from $23 at Truist
- Everbridge price target lowered to $32 from $38 at Canaccord
- Everbridge price target lowered to $21 from $25 at Baird
- Everbridge price target lowered to $20 from $25 at Barclays
- Everbridge backs FY23 adjusted EPS view $1.48-$1.52, consensus $1.49
