NetSuite (NYSE: N) and Marketo (NASDAQ: MKTO) both got coverage initiation Wednesday with Buy ratings that shared an appreciation for fast revenue growth and market leadership in the business software sector.
D.A. Davidson's Jack Andrews set a $29.20 target for Netsuite, a subscription-based business management software company that is 50 percent held by Oracle founder and Chief Executive Larry Ellison.
The cloud-based company is growing revenue at more than 32 percent.
Andrews views NetSuite as a leader in providing subscription-based management software to mid-sized companies, and said the market for such services is "in the early stage." Andrews hung a $109 target on the company.
"The key to the Netsuite story has been its ability to move up-market into larger organizations and gain share," Andrews said.
Andrews hung a $49 target on Marketo, which provides software for automated marketing.
Andrews called the segment "one of the few greenfield opportunities" in software, and sees Marketo revenue growth of 52 percent this year.
Although about 100 companies offer automated marketing software, including Salesforce.com, yet "the current competitive environment appears benign," Andrews said.
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