Analysts initiated coverage on UserTesting Inc (NYSE:USER), with significant upside.
- William Blair analyst Arjun Bhatia initiated coverage with an Outperform.
- Canaccord analyst David Hynes initiated coverage with a Buy and $15 price target (62% upside).
- The shares are now trading below the initial public offering price, which "creates a very interesting opportunity."
- He calls UserTesting a "high-conviction Buy," with the company growing in the mid-40% range.
- UserTesting is a video-based platform that collects the voice of the customer feedback. He sees this as a "hot category" and views the stock as "too cheap."
- Baird analyst Rob Oliver initiated coverage with an Outperform and $15 price target.
- Digital transformation is driving an "explosion" in digital products, and this requires enterprises to focus on customer experience in real-time, Oliver tells.
- The analyst says UserTesting is the leader in video-first customer experience software with a large total addressable market.
- Truist analyst Terry Tillman initiated coverage with a Buy and $15 price target.
- The analyst states that the company has achieved accelerating revenue growth throughout 2020/2021 by offering "highly differentiated" customer experience narratives which help its customers capture digitally recorded video narratives from targeted, opt-in audiences.
- Tillman adds that he is excited about the sustained strong top-line prospects for UserTesting in what he sees as a "highly dynamic" segment.
- Piper Sandler analyst Brent Bracelin initiated coverage with an Overweight and $15 price target.
- The analyst sees a favorable risk/reward profile given that the company's "unique" product features are gaining traction at some of the largest brands in the world.
- The company is disrupting market research with an on-demand cloud platform that records video interviews, converts them into data, analyzes, and packages them up into an easily digestible report.
- JPMorgan analyst Mark Murphy initiated coverage with an Overweight and $14 price target (51% upside).
- UserTesting is the leader in customer experience narratives, shaping the market with continued innovation.
- The analyst sees an attractive valuation at current share levels.
- Needham analyst Scott Berg initiated coverage with a Buy and $14 price target.
- Raymond James analyst Brian Peterson initiated coverage with a Strong Buy and $14 price target.
- Peterson thinks the secular shift toward technology-enabled market research methods and customer analytics creates several new software categories.
- Peterson believes UserTesting should be a prime beneficiary of this dynamic, given that its video-oriented platform can often provide more human insights than other data/survey-focused applications.
- Oppenheimer analyst Brian Schwartz initiated coverage with an Outperform and $14 price target.
- The analyst views UserTesting as a "leading technology disruptor" and believes the stock has catalysts to support fast software-as-a-service growth for the "foreseeable future."
- The company's valuation is also "reasonable," which is "increasingly difficult to find in the SaaS market."
- Morgan Stanley analyst Stan Zlotsky initiated coverage with an Overweight and $11 price target (19% upside).
- While the market for the company's real-time, video-based feedback to improve customer experiences is "nascent," Zlotsky sees a "large and greenfield" $29 billion total addressable market, which he sees giving UserTesting "a long runway of sustainable and profitable growth."
- The analyst notes that most UserTesting's new customers are greenfield wins and sees a higher need to educate prospects on the availability of digital platforms to access high-quality insights directly from customers quickly.
- He thinks the stock's current valuation underestimates the company's opportunity.
- Loop Capital analyst Yun Kim initiated coverage of UserTesting with a Buy rating and a $10 price target.
- Price Action: USER shares traded higher by 10.4% at $9.25 in the market session on the last check Monday.
