Although this may not lend significant upside to the current billings growth estimate for the January quarter, additional indications of wall-to-wall adoption by large enterprises could elevate Slack’s value as a strategic M&A (mergers and acquisitions) target, according to Piper Sandler.
Piper Sandler’s Brent Bracelin maintained an Overweight rating on Slack with a price target of $30.
Slack’s latest announcement implies a potential addition of 200,000 seats at IBM, given that the IT giant currently has 350,000 employees, Bracelin said in the note.
IBM’s wall-to-wall adoption of Slack may not lift the current Street estimate of 40.6% year-over-year billings growth for the fourth quarter, given the contract terms and tough compares, the analyst mentioned. He added, however that IBM’s move is an indication of Slack’s broader enterprise adoption.
Bracelin further wrote, “Our proprietary Piper Sandler JobsTracker analysis of new job postings shows several large enterprises that are hiring employees with Slack skill preferences.”
Referring to Slack’s prospects as a strategic M&A target, the analyst named IBM, Alphabet Inc (NASDAQ: GOOGL), Oracle Corporation (NYSE: ORCL), ServiceNow, Inc. (NYSE: NOW), Atlassian Corporation PLC (NASDAQ: TEAM) and salesforce.com, inc. (NYSE: CRM) as the potential suitors.
Shares of Slack were down 4.11% to $25.44 at time of publication.
Slack's Stock Trades Higher On Report IBM Moves Employees To Platform
Photo by Austin Distel on Unsplash
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