UBS analysts raised the rating for MeridianLink (NYSE:MLNK) from Sell to Neutral, adjusting their price target from $18.00 to $25.50. This upgrade reflects improved performance consistency and a positive shift in the lending environment anticipated with expected rate cuts in 2025, alongside growing confidence among financial institutions in the economic outlook.
Previously, UBS had concerns regarding MeridianLink’s cost management and the broader economic conditions affecting consumer lending, which accounts for around 78% of the company’s projected 2024 revenue. However, strong margin management, with guidance beats over the past five quarters, and a steady growth in the consumer lending segment—outside of mortgage lending—helped reinforce confidence in the company’s future performance. In the third quarter, MeridianLink exceeded adjusted EBITDA expectations by approximately 6% while maintaining revenue projections, achieving a year-over-year margin expansion of roughly 300 basis points to 42%.