Analysts Call Out Couchbase's New Logo Wins, Migrations, Capella And Cloud Deals Post Q3

  • Barclays analyst Raimo Lenschow maintained Couchbase Inc BASE with an Overweight and raised the price target from $17 to $18.
  • Couchbase reported a 1% ARR beat, leading to 28% CC growth (vs. 30% CC in Q2) and a 5% revenue beat leading to ~25% Y/Y growth. 
  • The top-line beat flowed through the P&L, and operating loss was ahead of consensus. 
  • RPO was up 28% Y/Y (vs. 40% in Q2), and cRPO increased 36% Y/Y (vs. 39% in Q2).
  • The analyst noted that the Q3 showed signs of BASE's relative defensiveness
  • However, management saw long sales cycles and extra layers of approval, similar to what other vendors across its space have called out recently. 
  • With shares trading at ~2.3x CY24E sales and promising long-term prospects for a business in a vast and growing NoSQL database market, the analyst remains Overweight on the name. 
  • RBC Capital analyst Matthew Hedberg reiterated an Outperform and lowered the price target from $20 to $18.
  • The price cut reflects reduced estimates as the analyst look to stay conservative.
  • Overall, Hedberg remains impressed by the company's execution in an uncertain environment. 
  • Capella continues to be an exciting opportunity and is becoming a more meaningful contributor to results. 
  • This quarter saw meaningful new logo additions, migrations, and pipeline activity from new and existing customers for Capella. Cloud partnerships drive bigger wins, with sizable deals through all three hyperscalers noted this quarter. 
  • Price Action: BASE shares traded lower by 1.49% at $13.18 on the last check Wednesday.
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