Here's Why Needham Continues To See 105% Upside To Avalara Post Its Analyst Day

  • Needham analyst Scott Berg attended Avalara, Inc's AVLR virtual analyst day, in which the company highlighted new products and provided intermediate-term financial targets that beat expectations. 
  • Avalara's new e-invoicing product was the center of further product discussion as it could represent a broad moat in what will likely be a large TAM. 
  • The new Returns for Accountants product should be an easy seller yet could create a new, sneaky Trojan horse-like partner channel. 
  • These new products and recent cross-sales yield new visibility into how the company can reach its 20% - 25% FY25 revenue growth target. 
  • A newly revealed FY25 operating model targeting a Rule of 40 structure was surprising to the upside on profitability because the lack of margin leverage at a decelerating revenue growth rate has been a recent focus for the AVLR short thesis.
  • Berg maintained a Buy rating on the stock with a price target of $150.
  • Price Action: AVLR shares traded lower by 2.73% at $72.76 on the last check Wednesday.
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