Lead analyst Michael Nemeroff views the offering as helping the company make technology acquisitions to boost its SEM/SPM product suites, in addition to improving Callidus' liquidity to fund future R&D initiatives and sales & marketing investments.
The analyst believes such investments "could support strong +30 percent on-demand revenue growth over the next few years, at least."
"We view CALD shares as attractive due to the company's: (1) best-of-breed, fully integrated product suite, which competes against mostly point solutions, (2) significant cross-sell / up-sell opportunity of multiple products into its existing customer base (only 400 out of 4,800 are using multiple CALD products)," Nemeroff wrote in a note.
Nemeroff also highlighted the company's improved margin profile and the transition to 100 percent subscription revenue, leading to "multiple expansion over time as CALD becomes more of a pure-play SaaS vendor."
Nemeroff maintained his revenue estimates for 2016 and 2017 of $205.0 million (+18.4 percent year-over-year) and $240.3 million (+17.2 percent year-over-year). But, he cut his EPS estimates to $0.27 and $0.35 from $0.28 and $0.37, respectively, to reflect dilution from the offering.
Shares of Callidus Software closed Friday's trading at $18.88. At time of publication Monday, Callidus was down 3.18 percent at $18.28.
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