Daily Update - March 15, 2023

Selected highlights of the day

By: Matthew Otto

GTLB

  • Continuing yesterday’s news UBS analyst Karl Keirstead has lowered the price target for GitLab from $54 to $35 but maintains a Buy rating.
  • Barclays analyst Ryan Macwilliams has lowered the price target from $65 to $45 but maintains an Overweight rating.
  • Goldman Sachs analyst Alexander Blostein maintains a Buy rating and has lowered his price target from $75 to $65.

 

Meta

CEO Mark Zuckerberg announced plans to cut 10,000 employees, with restructuring costs expected to range from $3 billion to $5 billion. This comes after the company laid off over 11,000 employees in November 2021. Zuckerberg has referred to 2023 as Meta’s “year of efficiency,” stating the company will cut projects that aren’t performing or may no longer be crucial, while removing layers of middle management to make decisions faster. The CEO has also warned that economic instability may continue for many years.

  • Raymond James analyst Aaron Kessler has maintained an Outperform rating on Meta and raised the price target from $220 to $238.
  • Citigroup analyst Anthony Powell has maintained a Buy rating and raised the price target from $228 to $260.
  • Oppenheimer analyst Jason Helfstein has maintained an Outperform rating on Meta and raised the price target from $235 to $260.
  • Evercore ISI Group analyst Mark Mahaney has maintained an Outperform rating on the stock and raised the price target from $275 to $305.

SCHW

  • Credit Suisse analyst Bill Katz has upgraded Charles Schwab from Neutral to Outperform. However, he has lowered the price target from $81.5 to $67.5.

SMAR

Smartsheet posted a fourth-quarter diluted earnings of 7 cents per share, compared to a loss of 12 cents per share a year ago, and beating analysts’ expectations for a loss of 1 cent per share. Fourth-quarter total revenue also rose 35% year-over-year.

  • RBC Capital Markets analyst Rishi Jaluria maintained his Sector Perform rating, he lifted his price target to $43 from $36, citing “profitability, conservative guidance, and further differentiation from competitors” but remained concerned about total addressable market and competition.
  • J.P. Morgan analyst Pinjalim Bora maintained his Overweight rating and raised his price target to $55 from $45, noting that the “operating leverage in the business is being driven by cost-optimization efforts” and that the company’s guidance for the full fiscal year 2024 was conservative.
  • Credit Suisse analyst Fred Lee maintains a Neutral rating and raises the price target from $40.
  • Needham analyst Scott Berg reiterates a Buy rating and raises the price target to $57.
  • Keybanc analyst Jason Celino maintains an Overweight rating and raises the price target from $48 to $53.
  • Guggenheim analyst John Difucci maintains a Buy rating and raises the price target from $48 to $54.
  • Oppenheimer analyst George Iwanyc maintains an Outperform rating and raises the price target from $50 to $55.
  • Wells Fargo analyst Michael Turrin maintains an Overweight rating and raises the price target from $45 to $50.

SentinelOne

Announced its financial results for the fourth quarter of fiscal year 2023, which ended on January 31, 2023. The company reported that its revenue increased by 92% to $126.1 million compared to the same quarter of the previous year, and its annualized recurring revenue (ARR) went up by 88% to $548.7 million as of January 31, 2023. Additionally, the company’s total customer count increased by approximately 50% to over 10,000 customers, and its customers with ARR over $100,000 grew by 74% to 905 as of January 31, 2023. The company’s gross margin also increased, with GAAP gross margin at 68% compared to 63%, and non-GAAP gross margin at 75% compared to 66%. SentinelOne had cash, cash equivalents, and investments totaling $1.2 billion as of January 31, 2023.

The company’s Q1FY24 guidance is for $137 million in revenue, while its full FY2024 guidance is for revenue between $631 million and $640 million and a non-GAAP gross margin between 73.5% and 74.5%.

  • Needham’s Alex Henderson maintains a Buy rating and a $19 price target.
  • Trevor Walsh of JMP Securities maintains a Market Outperform rating but lowers the price target from $36 to $26.
  • Wells Fargo’s Andrew Nowinski maintains an Equal-Weight rating but lowers the price target from $18 to $16.
  • Raymond McDonough of Guggenheim reiterates a Buy rating and a $18 price target.

SGEN

Morgan Stanley’s Matthew Harrison has raised the price target on Seagen from $173 to $229 while downgrading the stock from Overweight to Equal-Weight.

Varonis

Reaffirmed its financial outlook for the first quarter of 2023 and full year 2023. For Q1 2023, the company expects revenues of $106.0 million to $108.0 million, a YoY growth of 10% to 12%, and a non-GAAP operating loss of ($7.0) million to ($6.0) million. For the full year 2023, the company expects ARR of $513.0 million to $523.0 million, a YoY growth of 10% to 12%, free cash flow of $20.0 million to $25.0 million, and revenues of $519.0 million to $529.0 million, a YoY growth of 10% to 12%. The company also expects non-GAAP operating income of $36.0 million to $41.0 million and non-GAAP net income per diluted share in the range of $0.33 to $0.35.

  • Wells Fargo analyst Andrew Nowinski has upgraded Varonis Systems from Underweight to Equal-Weight and set a price target of $26.
  • Barclays analyst Saket Kalia has maintained an Equal-Weight rating but has raised the price target from $29 to $30.
  • JMP Securities analyst Erik Suppiger has reiterated a Market Outperform rating and a price target of $63.
  • RBC Capital analyst Matthew Hedberg has also maintained his Outperform rating and kept his price target at $31.

Porch Groupnha

Has reported its fourth-quarter results, with revenue totaling $64.1 million, up by 24% from the same period last year. The company also reported full-year revenues of $275.9 million compared to $192.4 million in 2021. However, Porch Group’s GAAP net loss for the fourth quarter of 2022 was $35.5 million compared to $20.1 million in the same quarter of the previous year, primarily due to higher-than-expected claims driven by Winter Storm Elliott. Adjusted EBITDA loss for the fourth quarter of 2022 totaled $13.3 million, compared to a loss of $5.4 million in the same quarter of the previous year. Despite this, Porch Group has reaffirmed its target of achieving Adjusted EBITDA profitability in the second half of 2023.

Porch Group’s 2023 guidance includes revenue of around $330 million to $350 million, representing over 20% year-over-year growth, and gross written premium of approximately $500 million. The company predicts revenue less cost of revenue of roughly $170 million to $180 million and Adjusted EBITDA of approximately $(30) million to $(40) million. The guidance assumes strong revenue growth in insurance and relatively flat year-over-year growth for Vertical Software.

  • Mark Schappel, an analyst at Loop Capital, has downgraded Porch Group from a Buy rating to a Hold rating, with a reduced price target of $2.
  • Daniel Kurnos, an analyst at Benchmark, has reiterated his Buy rating for Porch Group and maintained his price target of $14.