Shares of Talend (TLND) rallied today, closing out the day with gains of 11% after getting a bullish initiation from Wall Street. Craig-Hallum kicked off coverage of Talend with a buy rating alongside a price target of $55.
Analyst Chad Bennett argues that Talend will benefit from the secular trends toward digital transformation and cloud migration as enterprise organizations continue to modernize operations. The tech company provides data integration services for a variety of sectors through its software platform. Companies need to connect numerous fragmented data sources with data stores, and Talend is an established leader in that market, according to Bennett. Craig-Hallum estimates that the combined market opportunity in 2020 is approximately $23 billion.
Additionally, Bennett likes the new management team. In January 2020, Talend shook up its leadership, with Mike Tuchen stepping down and being replaced by a trio of experienced enterprise software veterans. Christal Bemont became CEO, Ann-Christel Graham was appointed chief revenue officer, and Jamie Kiser was named chief customer officer and COO.
Craig-Hallum believes that Talend's cloud business can accelerate annual recurring revenue growth in the second half of 2021 from the mid-teens to approach 20%. The company will also enjoy favorable billings comparisons in the first half of the year, according to the analyst.
Talend is scheduled to report fourth-quarter results on Feb. 10, and the company's guidance calls for revenue of $74.2 million to $75.2 million. That should result in an adjusted net loss per share of $0.29 to $0.32.