Expensify Inc. (NASDAQ:EXFY) is well positioned to evolve into a leading expense management solution for small and medium businesses, according to BofA Securities.

The Expensify Analyst: Koji Ikeda upgraded the rating for Expensify from Neutral to Buy, while raising the price target from $20 to $25.

EXFY Price Action: Shares of Expensify had spiked 12.69% to $19.72 at the time of publication Monday.

The Expensify Thesis: This is likely to be the first public blockchain-based software company that should be able to drive high EBITDA margins, Ikeda said in the upgrade note.

The analyst mentioned 5 reasons for turning bullish on Expensify:

• Lean business model, which supports a fast turn from high growth to high margins.
• Has a business that is more tied to total expense management than to travel.
• Attractive freemium model that is well suited for very small businesses (VSB).
• Competitive pressures are likely to ease as the company takes share in the VSB segment.
• VSB/SMB end-market is likely better prepared for 2023 than they were for 2020.