UPDATE: Piper Jaffray Initiates Model N with Neutral on Potential Near-Term Upside, Low Gross Margins

In a report published Monday, Piper Jaffray analyst Mark R. Murphy initiated coverage on Model N MODN with a Neutral rating and $22.00 price target. In the report, Murphy noted, “Model N is the leading provider of Revenue Management solutions optimized for life sciences and high tech manufacturers. While we see potential near-term upside to estimates, MODN shares are up 52% from the midpoint of the IPO pricing range and are being valued similarly to our comparables list despite Model N's lower gross margin profile. The average EV/2014 sales multiple for our comparables group is 3.6x. We apply the same multiple of 3.6x EV/2014 sales to calculate our MODN price target.” Model N closed on Friday at $20.54.