Skip to main content

Market Overview

Canaccord Equity's Buy Thesis On Exa Corporation Remains Intact

Share:
Canaccord Equity's Buy Thesis On Exa Corporation Remains Intact

A day after Exa Corp (NASDAQ: EXA) provided an earnings surprises for the fourth straight quarter, Canaccord Equity analysts David Hynes, Richard Davis and Mark Belcarz said there was no change in the firm's Buy thesis. However, the analysts have boosted the price target from $15 to $18.

The brokerage believes the recent quarterly results were fine but not great and indicated that Exa executed well, especially in license growth and margin maximization. The analysts expressed no concern over the company's revenue estimate miss by $0.4 million from their estimates, as it was within the guidance range.

The analysts remain optimistic on the issue, pointing out the mix shift toward subscription and licenses. Aside from that, the brokerage was relieved that the company maintained its full-year guidance, thus suggesting accelerated growth in the second half of the current year apart from slight enhancement in margin outlook.

Related Link: Talking Tech In Detroit: Working With React To Create A High-Speed News Platform

"If this team can execute as we expect, which means 3+ years of 300–500 bps of annual EBITDA margin gains on mid-teens license growth, EXA shares should continue to their gradual advance. We cannot say that this quarter increased our conviction, but we remain confident in our BUY rating and continue to believe that EXA can be the kind of off-the-radar small-cap that delivers outsized returns," the analysts concluded.

Canaccord pointed out some weakness in the heavy vehicle market and believes it could be a drag on growth prospects. The brokerage expects seasonal improvements in adjusted license growth, although it was below the targeted level in the second quarter.

At time of writing, Exa was trading at $15.72, up 1.35 percent on the day.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for EXA

DateFirmActionFromTo
Mar 2017Canaccord GenuityDowngradesBuyHold
Aug 2016Canaccord GenuityMaintainsBuy
Mar 2015Canaccord GenuityMaintainsBuy

View More Analyst Ratings for EXA
View the Latest Analyst Ratings

 

Related Articles (EXA)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Price Target Reiteration Analyst Ratings Movers Tech

Latest Ratings

StockFirmActionPT
COSTBairdMaintains395.0
FLGTPiper SandlerMaintains140.0
MUGoldman SachsMaintains118.0
JYNTDA DavidsonMaintains54.0
VERIRoth CapitalMaintains50.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com