- E-commerce platform provider VTEX ( NYSE: VTEX ) rose 5.7% Friday morning alongside an upgrade to Buy at BofA, which now sees the company reaching break-even earlier than expected.
- That follows mid-August earnings where the company boosted revenues by 25% year-over-year .
- Now a more bullish view on margin expansion suggests the company can reach EBITDA break-even earlier than though, in fiscal 2023, analyst Fred Mendes says, leading to more interest in the name and a higher valuation.
- "We see VTEX well positioned with (i) a top notch product, with low churn of ~5%/year, (ii) attractive valuation of 2.4x EV/Sales for a high quality company, especially considering its solid cash position of ~40% of its market cap and potential for earnings revision, (iii) a solid perspective for the e-commerce market in LatAm, which is still highly underpenetrated and (iv) upside potential from capturing market share in U.S. and Europe," Mendes said.
- BofA raised its price target to $6.50 from $4.50, now implying 59% upside.
For further details see:
VTEX gains as BofA upgrades on earlier break-even prospects