Apptio's Value Is In Its Ability To Address Real Problems With Unique Solutions

Jefferies initiated Apptio Inc APTI at a Buy, with a $29 price target, as the firm sees the company as addressing a persistent problem with a real solution.

Finding Success Where Others Failed

Analyst John DiFucci believes the company's unique data management platform, intuitive SaaS-based application suite and attractive value propositions to IT organizations positions it to successfully penetrate the logical technology business management market, where others have found difficulty in the past.

Massive Market Opportunity

Jefferies estimates a $8.1 billion opportunity for the company's current product set in 2016. This, according to the firm, could grow to $9.3 billion by 2020, representing 3 percent CAGR. The firm believes the technology business management sector to be a largely untapped, logical opportunity. Accordingly, the firm sees the company benefiting from the first successful mover advantage.

Related Link: Apptio Attempting To Leverage Its First Mover Advantage

Up-Sell, Cross-Sell Opportunities

Jefferies sees significant up-sell and cross-sell opportunities, as the company's platform currently has five discrete applications that can be deployed in a modular fashion. According to the firm, each app adds tangential and incremental value to the platform.

Jefferies, though seeing opportunities in more generic applications, recommends that the company focuses solely on establishing the TBM market and continuing to drive success in this massive opportunity for now.

At last check, shares of Apptio were down 0.58 percent at $20.40.

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