Guggenheim Starts Couchbase Inc (BASE) at Buy, ‘Capella-zing Beyond the Enterprise Base’
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Guggenheim analyst Howard Ma initiates coverage on Couchbase Inc (NASDAQ: BASE) with a Buy rating and a price target of $20.00.
The analyst comments “We are initiating coverage of Couchbase (BASE) with a Buy rating and price target of $20, about 45% above the current share price. Couchbase has created an enterprise-grade NoSQL database with a differentiated architecture designed to power modern applications that relational databases were not designed for. To date, Couchbase has been successful penetrating large enterprises, but growth has slightly lagged overall NoSQL market growth. We believe that Capella, the recently launched, fully managed, and cloud-native version of Couchbase’s database, will be the engine to accelerate growth and is a strategy that has worked for Software peers. We estimate that if Capella ramps successfully, then subscription revenue could grow 23% in FY24 and 21% in FY25 vs. consensus at 16% growth and 18% growth, respectively. Higher Capella CAGR could result in high-20s% growth in each of FY24 and FY25. At only 2.9x EV/NTM Recurring Revenue, the potential upside far outweighs limited downside, in our view.”
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Shares of Couchbase Inc closed at $14.01 yesterday.