Absolute Software's Growth Trajectory Unlikely To Be Affected By CRO Departure, Analyst Says

  • Needham analyst Scott Berg reiterated a Buy on Absolute Software Corp ABST and a $14 price target.
  • In what is quickly becoming a theme in Enterprise Software, Absolute's Chief Revenue Officer, Matthew Schonfeld, resigned from the company to pursue a role as President of a pre-IPO company. 
  • ABST promoted EVP, Channel, and Business Development Mark Grace to the role of CRO. The changes are effective November 4. 
  • While Berg always views this type of change through a lens of scrutiny, Grace has been with ABST for more than eight years and has had a significant influence over GTM changes over the last 12 months. The analyst views this should position Grace well for the sales leadership position. 
  • His ABST thesis centers around a significant change to the company's channel strategy, which Grace, in his role, has led and should limit concern with this leadership change.
  • His Absolute Software investment thesis calls for improving GTM strategies and new product innovations to result in more sustainable and higher revenue growth over the next several years. 
  • Coupled with a more profitable model than during recent years, he looks for ABST's EV/sales multiple to widen as its new strategies are better appreciated.
  • Price Action: ABST shares traded lower by 0.27% at $11.02 on the last check Wednesday.
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