Weave Communications, Inc. has been upgraded to a “Strong Buy” by Loop Capital Markets, with a price target of $18, reflecting confidence in its strategic maturity and growth potential.
The company reported strong revenue retention in Q3 2024, with gross and net retention levels at 92% and 98%, respectively, and a gross margin expansion to 72%.
Weave’s strategic partnership with Patterson Dental and increased vendor interest, along with a reasonable valuation with a forward EV/Sales multiple of 5.5x, make it an attractive investment opportunity.
Weave Communications, Inc. (NYSE:WEAV) offers a robust customer communications and engagement platform tailored for small and medium-sized businesses in the U.S. and Canada. The platform streamlines operations by reducing manual tasks and includes features like a customized phone system, text messaging, and payment processing. Weave serves various industries, including dental, optometry, and veterinary services.
Despite a slight decrease in the stock’s consensus target price from $17 to $16 over the past year, Weave Communications has shown promising financial performance. As highlighted by Loop Capital Markets, the company has been upgraded to a “Strong Buy,” with a price target of $18. This reflects confidence in Weave’s strategic maturity and growth potential.
In Q3 2024, Weave reported strong revenue retention, with gross and net retention levels at 92% and 98%, respectively. This success is attributed to effective product upsells. The company also achieved a gross margin expansion to 72%, with long-term targets set between 75% and 80%, indicating sustainable profitability improvements.
Weave’s recent Q4 2024 earnings call, featuring key figures like CEO Brett White and CFO Alan Taylor, highlighted the company’s robust growth in revenue, bookings, and net revenue retention rate. The company is well-positioned to capitalize on the growing healthcare marketing and communications market, particularly with its SaaS offerings.
A strategic partnership with Patterson Dental and increased vendor interest further enhance Weave’s growth prospects. The company’s valuation remains reasonable, with a forward EV/Sales multiple of 5.5x, making it an attractive investment opportunity. Analyst Mark Schappel from Loop Capital Markets has set a price target of $18 for Weave Communications.
