Stifel Starts Medallia Coverage Bullish, Says TAM Is Both Sizable And Strategic

Medallia Inc MDLA addresses a sizable and strategic total addressable market, and could return to mid-20% growth or even accelerate growth to 30% in the next few years, according to Stifel.

The Analyst

Stifel’s Tom Roderick initiated coverage of Medallia with a Buy rating and a price target of $43.

The Thesis

Medallia is the leader in the emerging Experience Management category of Enterprise software, Roderick said in the note.

Although the company began by building solutions to improve customer experiences in the hospitality industry, it has broadened its focus to include other verticals like retail, technology and financial services, the analyst mentioned.

He added that Medallia had also expanded the scope of its solutions from customer experience to business experience, employee experience and product experience.

Recently, there has been a marked shift in enterprises from focusing the total cost of tech ownership to a more customer and data centric approach and companies are increasingly seeking insights on the experiences of all key stakeholders, the analyst pointed out.

Roderick further mentioned that Medallia’s new CEO Leslie Stretch and CFO Roxanne Oulman have solid track records of success and have been able to reaccelerate the company’s bookings and achieve non-GAAP profitability in the last two quarters.

Price Action

Shares of Medallia were trading around $37.04 on Monday.

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