Market Overview

Here's What Wall Street Is Saying About Smartsheet

Here's What Wall Street Is Saying About Smartsheet

Smartsheet Inc (NYSE: SMAR), a cloud-based collaboration platform that makes it easier for businesses to plan, track and automate work at scale, saw its shares trade on a public exchange in late April for the first time.

Now that the quiet period has ended, some of the Street's top analysts are able to release their respective research reports.

The Analysts

  • Morgan Stanley's Stan Zlotsky initiated coverage of Smartsheet with an Overweight rating and $24 price target.
  • Canaccord Genuity's Richard Davis initiated coverage of Smartsheet with a Buy rating and $23 price target.
  • William Blair's Bhavan Suri initiated coverage of Smartsheet with an Outperform rating.
  • JPMorgan's Mark Murphy initiated coverage of Smartsheet with an Overweight rating and $22 price target.

Morgan Stanley: 'Smart' Opportunity

Smartsheet is well positioned to take advantage of the $20 billion total addressable market for collaboration management platforms, Zlotsky said. As it stands today, the company's penetration rate stands at around 1 percent but over it time its strong competitive moat coupled with a flexible, low-code platform could result in a sustainable 22 percent compounded annual growth rate over a 15-year period.

Canaccord: Attractive Growth Opportunity

Smartsheet will likely see "several years" of strong growth which will ultimately lead to a "quite attractive" profitability profile, Davis said.

The bullish stance on the stock can be attributed to four unique factors:

  • Smartsheet is a leading cloud-based platform for "work execution" as opposed to outdated platforms conceived in the 1990's that are still being used today;
  • The total number of "knowledge workers," that is total addressable market for Smartsheet, is 865 million and the company's market share is less than 1 percent today;
  • The company boasts "very attractive" metrics, including 80 percent gross margins, gross churn of around 10 percent, and net dollar retention of 130 percent; and
  • At its core the company is led by a "talented, deep" management team in an attractive segment.

William Blair: 92,000 Customers And Growing

Smartsheet's customer base stands at 92,000 with a strong net dollar retention rate 130 percent across all customers and 149 percent for customers with an annual recurring revenue rate of $5,000 per year, Suri said. Encouragingly, net dollar retention rates have been increasing since the start of 2016 while management is implementing a shift in the sales strategy to prioritize higher LTV customers.

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Latest Ratings for SMAR

Jan 2019Stephens & Co.Initiates Coverage OnOverweight
Dec 2018Morgan StanleyMaintainsOverweightOverweight
Nov 2018RBC CapitalMaintainsOutperformOutperform

View More Analyst Ratings for SMAR
View the Latest Analyst Ratings

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