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Software-as-a-service platform Consensus Cloud Solutions (NASDAQ:CCSI) rose as BTIG upgraded the stock on several positive catalysts.
The financial services firm believes the acute care and hospital buying market is improving, and expectations from CCSI for revenue and earnings growth are low.
CCSI seems inexpensive, cash-flow and margins are excellent and the business itself is transforming to become a SAAS, enterprise-wide technology platform that creates a fully integrated, inter-operable platform that is more than an eFaxing leader, BTIG said.
BTIG raised its recommendation on the stock to Buy from Neutral, with a price target of $30. The shares were trading +7.18% Wednesday noon at $21.80.
“As the migration of low or no margin SoHo accounts rolling off of the platform slows and as Corporate revenue growth picks up, BTIG would expect the shares to rally,” the research note said.
“BTIG also likes how CCSI seems to be managing Street expectations in a more conservative manner, beating EBITDA expectations in 3 of the past 3 quarters and revenue expectations in 2 of the past 2 quarters,” the note added.
The rating aligns with the average sell-side analyst rating of Buy.
However, Seeking Alpha authors and the Quant Rating system grade the stock as Hold.
“The near-term outlook remains uncertain due to the weak operating environment, which will continue to impact CCSI’s growth,” said SA contributor Jay Capital.