On Thursday, Stephens raised the price target on shares of Alkami Technology Inc (NASDAQ: ALKT) to $40 from the previous $35 while maintaining an Equal Weight rating on the stock. The company has reported better-than-expected results, showcasing a 27% increase in revenue and a 9.7% adjusted EBITDA margin. The firm also highlighted Alkami's raised full-year outlook, which now surpasses previous expectations.
Alkami Technology's year-over-year (Y/Y) Remaining Performance Obligations (RPO) grew by 30%, and the company tied its record quarter with 12 implementations. Additionally, newer cohorts of Alkami's products are seeing greater penetration, with an average of 19 products used compared to the portfolio average of 13-14.
The company announced its intention to develop its own captive Research & Development (R&D) offshoring capabilities. This strategic move is expected to enhance scalability and innovation while providing greater control over product development costs.
Despite the anticipation that these initiatives will create a 1-point margin headwind, the company's financial targets including the Rule of 40 by the end of 2025 and a gross margin of 65% by 2026 are projected to remain on course.
The decision to maintain an Equal Weight rating comes after Alkami's stock has already seen a significant year-to-date increase, rising by 57%. The firm's assessment also considers the relative valuation of Alkami in comparison to its peers such as NCNO and QTWO.
In other recent news, Alkami Technology Inc. made several significant announcements. The company reported a 25% increase in Q2 2024 revenue and an adjusted EBITDA of $4.6 million. Alkami also expanded its credit facility, further solidifying its financial standing.
Barclays maintained its Equalweight rating and a $35.00 price target for Alkami, predicting a significant number of user implementations in the second half of the year, contributing to a total of 2.8 to 2.9 million net subscriber additions for the full fiscal year 2024.
Citi upgraded its price target for Alkami from $32.00 to $37.00, reiterating a Buy rating, after assessing the company's robust demand environment and growth prospects. Similarly, Craig-Hallum raised its price target for Alkami to $38.00, maintaining a Buy rating on the stock.
Alkami announced a secondary offering of 5 million shares, sold by affiliates of General Atlantic, S3 Ventures, George B. Kaiser, and Brian R. Smith, with the offering managed by J.P. Morgan Securities LLC.
In terms of personnel, Alkami recently appointed Prerna Sachdeva as the new principal accounting officer, bringing over two decades of experience in global accounting and financial reporting. These are among the recent developments that highlight Alkami Technology's ongoing operational and financial progress.
InvestingPro Insights
Alkami Technology's recent performance aligns with several InvestingPro data points and tips. The company's revenue growth of 26.69% over the last twelve months supports the article's mention of a 27% increase in revenue. This strong growth is reflected in InvestingPro Tips, which highlight Alkami's high return over the last year and strong performance over the last three and six months.
The stock's current trading near its 52-week high, as indicated by an InvestingPro Tip, corroborates the article's mention of a significant year-to-date increase of 57%. In fact, InvestingPro data shows a 57.44% YTD price total return, almost exactly matching the article's figure.
While the article focuses on Alkami's positive outlook and growth, it's worth noting that an InvestingPro Tip suggests the company is not profitable over the last twelve months. This is supported by the negative operating income of -$54.22 million for the same period. However, another tip indicates that analysts predict profitability this year, which could be linked to the company's strategic moves and improved outlook mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Alkami Technology, providing a deeper understanding of the company's financial health and market position.
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