KeyBanc: LogMeIn Targets $41B Increase In Total Addressable Market

LogMeIn Inc LOGM, a provider of a cloud-based remote connectivity services, is in the early stages of a growth opportunity, and investors should take advantage of its valuation, according to KeyBanc Capital Markets. 

The Analyst

KeyBanc's Alex Kurtz initiated coverage of LogMeIn's stock with an Overweight rating and $135 price target.

The Thesis

LogMeIn boasts more than 4 million daily active users among multiple product portfolio lines, Kurtz said in the initiation note. The company's recent acquisition of Jive gives it access to the Unified Communications-as-a-Service market, in which average revenue per user stands at $4,000, as opposed to LogMeIn's customers at $500, the analyst said.

LogMeIn has the necessary resources to drive adoption of its UCaaS portfolio among its already existing installed base, which should result in growth beyond current estimates of 5 to 7 percent, Kurtz said. 

LogMeIn's acquisition of Jive is part of its strategy to broaden its established product portfolio to expand into adjacent markets that would increase its total addressable market from $5 billion to $46 billion, the analyst said. Kurtz highlighted some of LogMeIn's initiatives that are intended to increase its TAM ninefold: 

• Adding functionality to web conferencing products, a $2.9-billion market, which signals greater ambitions in the $25.5-billion unified communications and collaboration market.
• Expanding functionality in IT support and device management, a $600-million market. 
• Products like LastPass target the $6.8-billion access management market.
• LogMeIn is developing expertise in remote support and chat products, which represent a $1.3-billion market and are part of the broader, $13.8-billion contact center functionality market. 

Price Action

Shares of LogMeIn were trading higher by 0.44 percent at the time of publication Friday morning.

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