On Tuesday, Morgan Stanley (NYSE:MS) reaffirmed its Underweight rating and $9.00 price target for Amplitude Inc (NASDAQ:AMPL), following news of the company's Chief Financial Officer (CFO) departure.
The unexpected exit of the CFO, who had been with the company for less than one and a half years, prompted a search for a replacement. The current CEO Spencer Skates and SVP Corporate Controller Mike Dean will temporarily take on the CFO's duties. The company has indicated that the process of finding a new CFO had been ongoing for some time, suggesting that the transition may not have been as sudden as it initially appeared.
Despite the change in CFO, Amplitude has confirmed its financial outlook for the second quarter and the full fiscal year of 2024, projecting approximately 6% year-over-year revenue growth and a roughly 1% sequential decrease in the second quarter.
Morgan Stanley's analysis suggests that substantial growth beyond the company's conservative guidance is unlikely in light of the recent leadership change. The firm points out that Amplitude's stock is currently trading in line with the median for small and mid-cap companies at 0.36 times, but it views the stock as a relative underperformer.
This perspective is based on the valuation not reflecting the ongoing restructuring within the company and the lack of clear indicators for a recovery, especially considering the challenges in the end markets and the emerging nature of the product category in a constrained budget environment.
InvestingPro Insights
As Amplitude Inc (NASDAQ:AMPL) navigates through its recent CFO departure and reaffirms its financial outlook, the real-time data from InvestingPro provides additional context for investors. The company's market capitalization stands at approximately $1.19 billion, reflecting the investor sentiment surrounding its potential for growth and stability in the tech sector. Notably, Amplitude holds more cash than debt on its balance sheet, indicating a solid financial position that could help it weather the transition period and invest in future growth.
InvestingPro Tips highlight that Amplitude's liquid assets exceed its short-term obligations, which may provide some reassurance to investors concerned about immediate financial risks. However, it's important to note that the company has not been profitable over the last twelve months, with a negative P/E ratio of -12.64. Despite this, analysts predict Amplitude will become profitable this year, which could signal a turnaround that investors are eagerly anticipating.
Investors should also consider that Amplitude does not pay a dividend, a decision that may align with its focus on reinvesting earnings into growth and development. For those interested in a deeper dive into Amplitude's financial health and future prospects, InvestingPro offers additional tips. With the use of coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that could inform investment decisions. There are 5 more InvestingPro Tips available for Amplitude, which could offer valuable guidance in these times of change for the company.
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