Market Overview

Slack Has Big Tailwind Amid Work-From-Home Shift, Cowen Says

Share:
Slack Has Big Tailwind Amid Work-From-Home Shift, Cowen Says

The shift to the work-from-home model amid the pandemic has given a boost to Slack Technologies Inc’s (NYSE: WORK) value proposition and market opportunity, according to Cowen.

The Slack Analyst

Cowen’s Derrick Wood initiated coverage of Slack with an Outperform rating and a price target of $45.

The Slack Thesis

The remote work trend is likely to have “some level of permanency,” which boosts Slack’s total addressable market and enhances the value proposition of its software from nice-to-have to a must-have, Wood said in the note.

He added that the market seems to be underappreciating Slack’s potential, focusing too much on the threat from Microsoft Corporation’s (NASDAQ: MSFT) competing Teams product.

The analyst believes that as digital collaboration becomes increasingly strategic and mission critical for companies working in a distributed workforce environment, demand will “gravitate toward best-of-breed.”

Slack has a “low-touch, self-service” model for generating most of its new customers, which is supported by a direct sales team to drive expansion and by customer success teams to drive use-case expansion from the installed base. As a result, the company enjoys retention rates of over 130%, Wood noted.

He expects a re-rating of the stock following strong results, which are scheduled to be released Thursday.

WORK Price Action

Shares of Slack were trading higher by 1.8% to $37.84 at the time of publication Tuesday.

Related Links:

13 Technology Stocks Moving In Tuesday's Pre-Market Session

Slack, Zoom, And The "Stay At Home" Economy—Q1 Earnings Preview

Latest Ratings for WORK

DateFirmActionFromTo
Jun 2020Goldman SachsDowngradesNeutralSell
Jun 2020Piper SandlerMaintainsOverweight
Jun 2020Wells FargoMaintainsOverweight

View More Analyst Ratings for WORK
View the Latest Analyst Ratings

 

Related Articles (MSFT + WORK)

View Comments and Join the Discussion!

Posted-In: Cowen Derrick Wood Microsoft TeamsAnalyst Color Initiation Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
BKHMizuhoMaintains70.0
JOBAlliance Global PartnersUpgrades2.5
RARECanaccord GenuityMaintains91.0
TTDOppenheimerMaintains450.0
PYPLWedbushMaintains200.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com