Needham sees $40-$42 per shares as ‘top end’ of any Pros Holdings PE deal

After a press report stated that Pros Holdings (PRO) has hired Qatalyst Partners to review a potential sales of the company based on inbound interest, Needham said “a limited set of strategic acquirers,” combined with the current valuation and high relative interest rates for “a marginally profitable company,” could “limit share upside in a sale scenario.” The firm, which views IBM (IBM) and Salesforce (CRM) as the most likely strategic acquirers, would view a private equity deal “as the most likely outcome if the company chooses a sale.” In a PE scenario, the firm views a valuation of roughly six-times FY24 revenues, or $40-$42 per share, as “the likely top end of a potential sale.” The firm has a Buy rating and $40 price target on Pros shares, which are up $3.79, or 12%, to $35.78 in afternoon trading following Reuters’ report earlier.