Summit Starts inContact At Buy, Says It's A Leader In The Cloud Market

• Shares of InContact Inc SAAS have appreciated 36.38 percent over the last three months, although the shares dipped close to their 52-week low on October 8.
• Jonathan Kees of Summit Research on Monday initiated coverage of the company with an Overweight rating and price target of $12.
• Kees called InContact a leader in the cloud market, with a large and growing TAM.

Analyst Jonathan Kees elaborated that although it might be considered a speculative investment, the company was a leader in the “the high growth contact-center-as-a-service cloud market” and was expected to continue delivered above market growth.

Kees believes this growth would be driven by “share gains, strong partnerships, increased deal wins, strong integration with third-party applications, and technology leads.”

InContact has a cloud contact center opportunity worth $3.1 billion, which is currently growing at a CAGR of 14 percent and is expected reach $5.3 billion in 2018.

According to the Summit Research report, the company’s competitive advantages include “its customizable platform with a growing developer base and third-party applications, one of the largest industry reseller/channel partner network… and seamless integration with many third party applications.”

The company has a first mover advantage as well, with over 10 years of clouds experience and a large customer base. Kees expects InContact to move up to serving mid-sized enterprises, while growing its cloud revenues.

However, Kees expressed concern regarding the need for the company to spend large S&M each quarter in order to drive contract awards, as well as the high level of investment in the business to drive innovation and development.