Shares of Procore Technologies Inc (NYSE: PCOR) were seen trading up nearly 10% today after a Goldman Sachs analyst turned bullish on the construction management software company.
Procore shares could climb to $75
On Thursday, Kash Rangan raised his rating on the Carpinteria-headquartered firm to “buy” and announced a price objective of $75 that suggests about a 41% upside on its previous close.
The bullish call arrives only hours after Procore Technologies Inc reported strong results for its first financial quarter.
Since construction is a low-margin business, Procore’s customers by default bid on a wide array of projects in various industries to reduce concentration risk, which benefits Procore’s own diversification efforts.
The analyst now expects this construction technology company to grow its revenue by 29% this year. Procore shares are down 20% versus their year-to-date high at writing.
Why else is he bullish on Procore stock?
Kash Rangan likes this software as a service (SaaS) company because the construction industry lacks streamlined means of digitisation.
Other reasons cited for the constructive view on Procore shares include its backlog of customers and a hint of positive sentiment from the management. The analyst said in his research note:
Customer backlog provides insulation from near-term demand degradation since its customer base has to work through existing backlogs before slowdown in construction would impact their ability to land new projects.
He remains bullish on the cloud stock even though WCM Investment Management recently revealed to have trimmed its exposure to Procore Technologies Inc by 7.2% in the fourth quarter.
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