Smartsheet stock sees target boosted by RBC Capital, acquisitions by Blackstone and Vista at $8.4B valuation via Investing.com
On Wednesday, RBC Capital adjusted its price target The company Smartsheet Inc . (NYSE: NYSE: ) shares, rose to $56.50 from the previous target of $51.00. The company has maintained a Sector Perform rating on the stock. The settlement follows Smartsheet's announcement that it has entered into a definitive agreement to be acquired by private equity firms Blackstone (NYSE: ) and Vista Equity Partners.
The acquisition agreement values Smarsheet at $56.50 per share, which translates to an equity value of approximately $8.4 billion. The offer is an 8% premium over the stock's closing price on Monday and a 41% premium compared to its 90-day volume weighted average price. The transaction is also valued at 6.1x enterprise value to next twelve months (NTM) earnings multiple and 29x NTM free cash flow (FCF).
RBC Capital's commentary on the acquisition highlighted the premium being offered as “reasonable” given Smartsheet's limited addressable market (TAM) and the highly competitive nature of the market in which it operates. The analyst pointed out that the acquisition price reflects these market conditions.
The agreement is a significant step for Smartsheet, a company specializing in cloud-based platforms for task management and automation. The acquisition of Blackstone and Vista Equity Partners will give Smartsheet additional resources and growth potential in its field.
Investors and market watchers will be closely monitoring Smartsheet's stock performance and any developments related to the acquisition process. The announcement has already had a noticeable impact on Smartsheet's market value and will likely have an impact on the company's financial performance in the near future.
In other recent news, Smartsheet Inc. agreed to a private acquisition by Vista Partners and Blackstone, a deal valued at $8.4 billion. The transaction led to changes in the stock's ratings, with Canaccord Genuity, William Blair, and JPMorgan adjusting their ratings to match the acquisition price of $56.50 per share. In addition to these major developments, Smartsheet reported a 17% increase in revenue for the second quarter of fiscal year 2025, reaching $276.4 million, and a similar increase in recurring revenue for the year, reaching $1.093 billion.
At the same time, the company announced a change in its management structure, with Chief Operating Officer Stephen Branstetter moving into an advisory role.
InvestingPro Insights
Considering RBC Capital's target adjustment for Smartsheet Inc. (NYSE: SMAR) and recent company acquisition news, exploring InvestingPro's latest data provides more context for investors. Smartsheet has a market capitalization of $7.71 billion, which closely matches the equity value of the acquisition deal. Despite a negative P/E ratio indicating that the company is currently unprofitable, Smartsheet's gross profit margin stands at an impressive 81.61% for the last twelve months from Q1 2023, highlighting its strong ability to control costs relative to revenue.
InvestingPro Tips suggests that Smartsheet's revenue is expected to grow this year, with 10 analysts revising their earnings estimates for the future. This optimism is also proven by the company's revenue growth of more than 20% during the same period. Additionally, Smartsheet's stock has been performing strongly, with a return of 30.99% over the past three months and is trading near its 52-week high, indicating positive sentiment for investors.
For those looking to delve deeper into the company's prospects, InvestingPro provides additional information, including additional tips on Smartsheet's financial health and future prospects. To test this further, investors can visit where more than 10 additional InvestingPro tips are available, providing a comprehensive analysis of the company's performance and potential.
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