Marketo's 20 Percent Drop Spurs Upgrade

On Tuesday, UBS upgraded shares of

from Sell to Neutral. Analyst Brent Thill's rating change comes after the stock declined 20 percent “on no fundamental new news” from its peak of $45 earlier in the year. Marketo's SaaS marketing automation pdt “remains one of the most popular with customers and industry analysts, and its revenue growth rate (consensus +41% NTM) is one of the highest in SaaS,” said Thill. However, the analyst feels Marketo could get “squeezed from both above and below” by competitors. Private companies “such as Act-On and others are running into Marketo more often,” said the analyst. Thill maintained a $40 price target, which is based on “EV/S of 9.5x, a 25% premium to SaaS group median, applied to UBSe revenues in 5-8 quarters.” Shares of Marketo are up 4.4 percent to $37.75 on the back of Thill's upgrade.