Deutsche Bank Says This SMID-Cap Software Stock Is Ready For When The Market Recovers

Anaplan Inc PLAN, a cloud-based planning software company, is an underappreciated stock in a difficult market, according to Deutsche Bank. 

The Anaplan Analyst

Taylor McGinnis initiated coverage of Anaplan with a Buy rating and $50 price target. 

The Anaplan Thesis

Sentiment toward Anaplan, which was once a favored name among SaaS companies, began deteriorating when the company reported a billings miss in the fourth quarter of fiscal year 2020 and following the departure of chief growth officer Mark Anderson after a short stint, McGinnis said in a Tuesday note.

The onset of the COVID-19 pandemic and the economic slowdown only served to worsen things, making the stock the worst performer in the software sector since the initial market meltdown in early March, the analyst said. 

As opposed to the 3% average gain for the industry, Anaplan shares are down 10%, she said.

McGinnis attributed the underperformance to investor perception that the company will be a laggard relative to its peers in the environment.

However, Anaplan is positioned to emerge as an outperformer, especially in the event of a recovery, the analyst said, citing conversations with customers and partners.

PLAN Price Action

Anaplan shares were down 2.08% at $36.73 at the time of publication Tuesday.

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