AVGO - Broadcom's potential $15B SAS deal a positive for Alteryx - Citi

NicoElNino/iStock via Getty Images Alteryx (AYX) is off 4.5% despite a new note from Citi that sees positives in the reports that Broadcom (AVGO +1%) is eyeing a deal for SAS Institute at $15B-$20B. That price - implying a multiple of 5-7x SAS 2020 revenues - puts a valuation floor on Alteryx, trading toward the high end of the proposed acquisition range on 2022 estimated ARR at "much higher growth rates." SAS revenue growth rates have been "flattish, even declining in 2020" amid hotter competition along with COVID-19 headwinds. Meanwhile, the loss of relevancy of SAS among younger data scientists - in part due to a decades-old decision to discontinue free software for universities - has meant competitive tailwinds for Alteryx, it notes. Broadcom's acquisition strategy in software has historically focused on driving cost cuts to achieve greater profitability," Citi says. "We believe there could be significant cost cut potential

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Broadcom's potential $15B SAS deal a positive for Alteryx - Citi