Pivotal Software Quiet Period Ends, Analysts Weigh In

The quiet period following the IPO of Dell Technologies spin-off Pivotal Software Inc PVTL has ended, and several Wall Street analysts have weighed in on the stock. Here’s a rundown of what they’ve had to say.

Voices From The Street

William Blair analyst Bhavan Suri said Pivotal is on the cutting edge of the cloud computing industry.

“At an enterprise value of 5.3 times our calendar 2019 revenue estimate, shares trade at a discount to the peer groups against which we compare the company,” Suri wrote.

Morgan Stanley analyst Sanjit Singh said Pivotal is a market leader in helping large enterprises improve their software development efficiency.

“These strengths,along with the ability to run in the leading public and private cloud environments, in our view, well position Pivotal to sustain 35%+ growth thru 2020 in a ~$22 billion market opportunity,” Singh wrote.

KeyBanc analyst Alex Kurtz said Pivotal is a trusted digital transformation specialist.

“Pivotal has a differentiated architecture and model compared to other PaaS providers, relying on the open-source Cloud Foundry project to allow developers to ‘just deploy code,’ while enabling digital initiatives for large enterprises with Pivotal Labs,” Kurtz said.

Credit Suisse analyst Brad Zelnick said Pivotal has a financial model that tech investors should find very attractive.

“We see significant opportunity given a surge in cloud-native spending, Pivotal’s attractive subscription-based financial model, compelling unit economics, and a well-defined path to profitability,” Zelnick wrote.

Ratings

• William Blair has an Outperform rating.
• Morgan Stanley has an Overweight rating and $24 target.
• KeyBanc has an Overweight rating and $24 target.
• Credit Suisse has an Outperform rating and $22 target.

At time of publication, Pivotal Software shares were trading around $19.25.

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