ENFN - Enfusion stock jumps after Morgan Stanley upgrades to Overweight

Enfusion ( NYSE: ENFN ) stock surged as much as 12.5% in Tuesday morning trading after Morgan Stanley analyst James Faucette upgraded the stock to Overweight from Equal-Weight, citing an attractive entry point in the wake of an "overly punitive multiple."

The provider of software-as-a-service (SaaS) solutions for the investment management industry continues to experience "conversion success," Faucette wrote in a note, enabling the company to "expand beyond its core hedge fund clients to larger institutional investment managers with broader mandates."

ENFN shares, though, have dropped some 50% from a year ago, in a move stemmed from changes in the company's management, "execution challenges, and concerns of depressed new fund formation," the analyst noted.

But that drawdown seems "overly punitive to us," he emphasized, while noting that ENFN's faster revenue growth and margin expansion potential "warrant a modest premium to the vertical software universe."

The Overweight rating diverges from the Quant's Hold rating but agrees with the average Wall Street analysts' Buy rating.

In December, Enfusion brought on Shift4 Payments' Brad Herring as CFO. A few days later, it named Oleg Movchan as its new CEO .

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