MODN - JNJ cloud transition leads BTIG to raise Model N to buy

Yesterday, Model N ([[MODN]] +4.3%) announced the financial results for the first quarter of fiscal 2021 where both revenue and EPS came ahead of expectation.Noting a 12% rise in Q1 FY21 Subscription revenue as a return to double-digit growth, BTIG upgrades the stock to buy from neutral with the price target of $60 implying ~47.3% upside to the previous close.Model N also disclosed the decisions by Johnson & Johnson (JNJ) and Fresenius Medical Care (FMS) to transition to Model N Revenue Cloud for Life Sciences from their on-premise versions of revenue management.Highlighting it as the ‘biggest news of the quarter,’ the analyst Matthew VanVliet notes the JNJ deal as Model N’s largest.However, in a recent neutral thesis, Seeking Alpha contributor Patrick Doyle observes the persisting losses of Model N with a suggestion to those who want exposure to the stock, ‘call options provide a much better alternative to stocks.’

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JNJ cloud transition leads BTIG to raise Model N to buy