What happened
Shares of Alteryx (AYX) were moving higher today after the data analytics software company got an upgrade from Morgan Stanley.
As a result, the stock was up 6.1% as of 2:54 p.m. ET.
So what
Morgan Stanley raised its rating on Alteryx, which has struggled in recent years, from equal weight to overweight, and maintained a price target of $54.
The analyst noted that shares of the software stock are down nearly 30% year to date, creating a better risk/reward at its current valuation, a price-to-sales ratio of 2.7 with profitability expected to ramp higher this year and next year.
Morgan Stanley observed that Alteryx's annual recurring revenue was nearing $1 billion, and the company has penetrated 48% of the Global 2000, showing its software is a valuable tool for many of the world's biggest companies.
The investment bank also said the company would benefit as it helps streamline analytics work in the large enterprise market.
Now what
Alteryx stock has struggled since 2020 as its transition to the cloud has been slow and the company lost customers in the early stages of the pandemic.
In its second-quarter report last month, the company announced annual recurring revenue growth of 22% to $890 million. Yet reported revenue was up just 4% to $188 million, a reflection of the impact of the challenging macro environment and the ongoing transition to the cloud, which changes the way revenue is booked.
Alteryx has long seemed to have potential in the data analytics category, and the software stock does look cheap with shares down 80% from their peak in 2020. However, the latest results show the hoped-for turnaround has yet to come.
