It’s been lower than a month since AvePoint (NASDAQ: AVPT) closed its merger with particular objective acquisition firm (SPAC) Apex Know-how Acquisition Firm, and the enterprise software program specialist is now receiving a bullish initiation from Wall Avenue.
Goldman Sachs (NYSE: GS) has began AvePoint off with a purchase ranking alongside a value goal of $17, which represents a whopping 68% upside from Tuesday’s closing value.
As of 12:15 p.m. EDT, AvePoint shares had been up 13%. Right here’s why Goldman Sachs likes AvePoint.
Using Microsoft’s coattails
AvePoint is a software-as-a-service (SaaS) firm that focuses on information administration options for enterprise organizations that leverage Microsoft (NASDAQ: MSFT) 365. The COVID-19 pandemic has accelerated the speed at which corporations are endeavor digital transformations, which represents a chance for AvePoint (and Microsoft).
“AvePoint is an enterprise information migration chief, facilitating seamless and safe migration of knowledge from legacy on-premise programs to cloud ecosystems, with a major deal with Microsoft Cloud,” Goldman Sachs analyst Brian Essex wrote in a analysis word to buyers. “AvePoint’s options additionally allow information governance and safe collaboration amongst enterprise customers.”
Whereas many SPAC targets are speculative pre-revenue startups, AvePoint is comparatively much less dangerous because it generated $151.5 million in income in 2020, Essex notes. Annual recurring income (ARR) additionally grew by 33% within the first quarter, which AvePoint reported earlier than closing the de-SPAC transaction.
The corporate is forecasting income of $257 million in 2022, with progress pushed by increasing the client base whereas aggressively focusing on small- and medium-sized companies (SMB) and catering to particular industries.
AvePoint estimates that simply 3% of Microsoft’s cloud buyer base use AvePoint, suggesting that it has loads of upside as there are 250 million Microsoft prospects to pursue.
SPAC sentiment stays tender
Following an unprecedented SPAC increase in 2020, investor sentiment in the direction of clean verify corporations has cooled considerably in 2021 as a result of considerations round valuation in addition to heightened regulatory scrutiny.
A current SEC motion towards Steady Street Acquisition (NASDAQ: SRAC) concerning poor due diligence over its goal Momentus has additionally contributed to broader investor skepticism round SPACs as an asset class.
SPAC shares used to leap as soon as definitive agreements (DAs) had been introduced, however these days many SPAC share costs keep near the $10 web asset worth (NAV). Even after closing its merger, AvePoint had closed at simply $10.12 on Tuesday.
Essex believes the market shouldn’t be absolutely appreciating AvePoint’s potential, suggesting that the corporate has “remained comparatively undiscovered” following the de-SPAC. The analyst means that AvePoint’s valuation is cheap when contemplating its progress potential. Goldman Sachs is modeling for a compound annual progress price (CAGR) of over 30% by way of 2023.
“We imagine the tempo of digital transformation, accelerated by COVID-19, coupled with rising Workplace 365 adoption will proceed to function secular tailwinds for AvePoint,” Essex provides.
Decide Like A Professional
The place to speculate $500 proper now
Before you purchase Amazon, or Netflix, or Apple, take into account this…
The staff at Motley Idiot first advisable every of these shares greater than a dozen years in the past!
- They found Netflix for $1.85 per share, again within the days of DVDs by mail.
- And advisable Amazon at $15.31 in 2002, earlier than most individuals had been comfy utilizing bank cards on-line.
- And even hit Apple at $4.97 per share, a couple of month earlier than the discharge of the very first iPhone.
Take a look at the place these shares are in the present day. The underside line: a $500 funding in all three of those shares could be price greater than $200,000 in the present day!
And right here’s why that’s essential: The Motley Idiot’s flagship investing service Inventory Advisor simply introduced their prime 10 “greatest buys now” throughout the complete inventory market. Whether or not you’re beginning with $100, $500, or extra, you’ll wish to get the complete particulars!
Click on right here to be taught extra