Analyst Upgrades RealPage On Solid Results, Constructive Guidance

RealPage Inc RP reported strong results for the fourth quarter and its guidance indicates an acceleration in organic growth in 2020, according to DA Davidson.

The RealPage Analyst

Peter Heckmann upgraded RealPage from Neutral to Buy while raising the price target from $60 to $66.

The RealPage Thesis

RealPage’s guidance for 2020 came in meaningfully ahead of expectations, including an acceleration in organic growth from 9%-10% in 2019 to 10%-12%, Heckmann said in the note.

The company reported fourth-quarter revenue of $255 million, representing 12% growth and beating the consensus estimate. The analyst further noted that adjusted EBITDA margins expanded 310 basis points on a year-on-year basis to 29.9%, despite “an increased focus on solution integration and accelerating complex implementations.”

Adjusted earnings grew 23% to 48 cents per share, also coming in higher than the consensus estimates.

RealPage made the largest acquisition in its history in December, when it took over Buildium, a provider of cloud-based solutions for smaller property managers, for $580 million in cash. Heckmann added that this acquisition significantly expanded the company’s presence in the market for small and medium businesses.

Following management’s guidance, the analyst raised revenue and earnings forecasts for 2020 and 2021.

RP RP Price Action

Shares of RealPage were up 11.47% to $61.36 at time of publication.