Pluralsight Analyst: Online Education Company Could Sustain 30% Growth In Near-Term

Pluralsight Inc PS addresses a large and expanding market and could sustain more than 30% growth in the near-term given “its cloud-based platform, differentiated content generation and highly referenceable marquee client base,” according to KeyBanc Capital Markets.

The Analyst

Arvind Ramnani initiated coverage of Pluralsight with an Overweight rating and $40 price target.

The Thesis

Pluralsight is well-positioned in a $31-billion market that is expected to expand due to multiple secular drivers, Ramnani said in a Tuesday initiation note. (See his track record here.) 

Enterprises are feeling an intense need to maintain and enhance the tech-based skills of their employees, as they are becoming a competitive differentiator, the analyst said. On the other hand, the cost of training employees in these desired skills “continues to increase exponentially,” he said. 

Pluralsight is well-positioned to benefit from these trends because the company has a cloud-based platform that focuses on technology skills education for enterprises, Ramnani said. Moreover, the content is generated by technical experts and practitioners, he said. 

Pluralsight helps enterprises identify their technical skills gaps to make better strategic tech decisions, the analyst said. 

Given the significant investments in sales and content generation, the company is likely to turn EPS-positive in 2021, according to KeyBanc. 

Price Action

Pluralsight shares were trading higher by 2.61% to $31.45 at the time of publication Wednesday. 

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