3 Reasons Why Barclays Is Bullish On Pluralsight

Online education company Pluralsight Inc (NASDAQ: PS) on May 17 offered 20.7 million shares in an IPO, pricing shares at $15 apiece.

With the IPO quiet period expiring, analysts began coverage on shares.

The Analyst

Barclays analyst Saket Kalia initiated coverage with an Overweight rating and a $30 price target.

The Thesis

Pluralsight is operating in the IT training market, having a potential of $17 billion to $20 billion per year, with eLearning having a 27 percent share in the overall market, Kalia said in a Monday note.

eLearning's share, according to the analyst, is expected to grow to 33 percent by 2021, thanks to its advantages of it being cheaper and more measurable than classroom-based learning.

"The secular shift will help the eLearning market grow by double digits through 2021, and is a key tailwind for Pluralsight, in our opinion," Kalia said.

The analyst said the company has several competitive advantages such as "depth of content, flywheel effect of authors and its proprietary AI platform."

Barclays thinks Pluralsight stock, though not cheap, gives access to a unique asset, with distinctive competitive advantages and growth profile.

The Price Action

Since its May 17 listing, Pluralsight stock has gained 27.2 percent. Shares closed Monday up 7.4 percent at $27.32.

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