AYX - Alteryx stock soars ~15% after BofA upgrades to Buy
2023-06-01 14:25:53 ET
Alteryx ( NYSE: AYX ) stock rose ~14% on Thursday after BofA Securities upgraded the stock to Buy from Neutral and raised the price target to $70 from $60 as the firm saw an attractive risk/reward at current price.
BofA analysts said Alteryx's cloud strategy is progressing and the installed-base resilient. The firm's checks at Alteryx’s customer conference Inspire suggest that while Analytics Cloud still lags Designer's functionality, good progress has been made over the past year (scheduling, workflow porting, among other things) which clears certain adoption hurdles.
The checks also pointed to growing Cloud demand, suggesting it should be a healthy growth driver over the coming 12 to 24 months. In addition, the customer checks suggested a resilient installed-base with high retention, as none had plans to reduce seats and most intend to expand (seats, add-ons), according to BofA.
This gives the firm confidence that AYX's management 2023 ARR guide is achievable.
Another reason for the upgrade was that the analysts think that Alteryx's new generative AI products could drive higher demand.
The firm was impressed with demo of AiDEN — Alteryx's new generative AI and ML engine which is embedded in the Analytics Cloud Platform. The analysts believe that it raises the value proposition and should be a catalyst for faster adoption of Analytics Cloud and Designer/Server as organizations use more of the company's products.
Lastly, the firm thinks that Alteryx's 2028 targets look achievable.
At the analyst day, Alteryx's management — provided visibility/clarity into the ARR to revenue walk; discussed bookings/revenue seasonality; added new metrics ($250k+ ARR customers); and set up a long term target timeframe of 2028. The firm believes that management providing a timetable on its long term targets showed confidence in its end-market positioning and model predictability.
The analysts noted that consistent execution from here should be a catalyst to drive Alteryx's discount valuation multiple higher.
Earlier this week, Oppenheimer added Alteryx ( AYX ) to its top picks and gave the analytics platform developer an Outperform rating.
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Alteryx stock soars ~15% after BofA upgrades to Buy