On Friday, JPMorgan (NYSE:JPM) adjusted its stance on EverCommerce Inc (NASDAQ:EVCM), downgrading the stock from Neutral to Underweight and reducing its price target from $11.00 to $10.00.
The investment firm's decision follows EverCommerce's strategic moves, including the recent sale of its Fitness vertical, as part of a broader business transformation expected to span 18 to 24 months, with 2024 anticipated to be the pivotal year for these changes.
JPMorgan acknowledged positive developments within EverCommerce, such as a shift in revenue towards more profitable payment services and cost optimization measures that have improved margins. Despite these improvements, JPMorgan expressed concerns over the potential for revenue growth, particularly due to challenges within the company's Marketing Technology (MarTech) operation.
The price target adjustment reflects a 9% decrease to $10 per share. The downgrade to an Underweight rating indicates that JPMorgan sees EverCommerce's stock performing less favorably compared to other companies in its coverage universe.
The business transformation that EverCommerce is undergoing is a significant overhaul, with the CEO indicating that the sale of the Fitness vertical is merely the initial phase. The company aims to refine its revenue mix and enhance profitability, but the analyst from JPMorgan suggests that these efforts may not sufficiently elevate revenue prospects in the near term.
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