On Thursday, BMO (TSX:BMO) Capital Markets adjusted their outlook on Smartsheet Inc . (NYSE:SMAR) shares, increasing the price target to $48 from the previous $42, while maintaining an Outperform rating on the stock.
This adjustment comes after Smartsheet reported a quarter that exceeded expectations, showing particular strength in its enterprise business despite a challenging economic environment.
The company not only surpassed the consensus estimates for Annual Recurring Revenue (ARR) for the April quarter but also upgraded its forecast for FY25 ARR. BMO Capital believes that the guidance provided by Smartsheet remains on the conservative side.
The firm also noted the potential benefits from recent strategic moves by Smartsheet, including pricing and packaging changes, along with continuous innovation on its platform, which could provide additional growth opportunities.
In light of the recent financial results and strategic initiatives, BMO Capital has only made slight changes to their estimates. However, their forecasts for Free Cash Flow (FCF) in FY25 have been increased.
The revised price target reflects an attractive valuation for Smartsheet, according to BMO Capital, which supports their decision to retain the Outperform rating on the company's shares.
Smartsheet's performance and the positive outlook from BMO Capital suggest the company is navigating the current economic landscape effectively, with strong enterprise business performance and strategic initiatives that could drive further growth.
In other recent news, Smartsheet Inc. began the fiscal year with a 20% increase in total revenue, hitting $263 million in the first quarter.
The company's adjusted earnings per share were $0.32, outpacing analyst expectations of $0.27. Subscription revenue also observed a 21% rise year-over-year, reaching $249.1 million.
Wells Fargo (NYSE:WFC), RBC (TSX:RY) Capital, and Canaccord Genuity (TSX:CF) have all raised their price targets on Smartsheet, highlighting the company's robust performance and the introduction of a new $150 million stock buyback program.
Looking forward, Smartsheet anticipates total revenue for the second quarter to be between $273 million and $275 million, with non-GAAP operating income projected between $38 million and $40 million. These are among the recent developments for Smartsheet.
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