Smartsheet stock sees target raised by RBC Capital, acquisition by Blackstone and Vista valued at $8.4B By Investing.com

On Wednesday, RBC Capital revised its price target to Smart Sheet Company (NYSE: NYSE: ) stock, raising it to $56.50 from a previous target of $51.00. The firm maintained a sector perform rating on the stock. The revision comes on the heels of 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 values ​​Smartsheet at $56.50 per share in cash, translating into a stock value of approximately $8.4 billion. The offer represents an 8% premium to the stock’s closing price on Monday and a 41% premium to the 90-day volume-weighted average price. The deal also values ​​the company at a multiple of 6.1x trailing-twelve-month revenue (NTM) and 29x NTM free cash flow (FCF).

RBC Capital’s commentary on the acquisition highlighted the attractive price offered as “appropriate” given Smartsheet’s limited total addressable market and the highly competitive nature of the market in which it operates. The analyst noted that the acquisition price reflects these market conditions.

This transaction represents a significant step forward for Smartsheet, a company specializing in cloud-based work management and automation platforms. The acquisition by Blackstone and Vista Equity Partners will provide Smartsheet with additional resources and growth potential in its sector.

Investors and market watchers will be closely watching Smartsheet’s stock performance and any further developments related to the acquisition. The announcement has already had a significant impact on Smartsheet’s market valuation and is likely to impact the company’s financial trajectory in the near future.

In other recent news, Smartsheet Inc. agreed to a private acquisition by Vista Partners and Blackstone, in a deal valued at $8.4 billion. The deal resulted in changes to 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 key developments, Smartsheet reported a 17% increase in revenue for the second quarter of fiscal 2025, totaling $276.4 million, and a similar increase in annual recurring revenue, which reached $1.093 billion.

Meanwhile, the company announced a change in its executive structure, with Chief Operating Officer Stephen Branstetter moving to an advisory role.

InvestingPro Insights

In light of RBC Capital’s price target adjustment for Smartsheet Inc. (NYSE: SMAR) and the company’s recent acquisition news, a quick look at InvestingPro’s latest data provides additional context for investors. Smartsheet has a market cap of $7.71 billion, which is closely aligned with the equity value of the acquisition deal. Despite a negative price-to-earnings ratio that suggests the company is currently unprofitable, Smartsheet’s gross profit margin is an impressive 81.61% over the past twelve months as of Q1 2023, highlighting its strong ability to control costs relative to revenue.

InvestingPro advises that Smartsheet’s net income is expected to grow this year, with 10 analysts revising their earnings upwards for the coming period. This optimism is supported by the company’s revenue growth of more than 20% in the same time frame. Additionally, Smartsheet’s stock has performed strongly, returning 30.99% over the past three months and trading near its 52-week high, reflecting positive sentiment among investors.

For those looking to dig deeper into the company’s prospects, InvestingPro offers additional insights, including more tips on Smartsheet’s financial health and future prospects. To explore these further, investors can visit https://www.investing.com/pro/SMAR, where over 10 additional InvestingPro tips are available, providing a comprehensive analysis of the company’s performance and potential.

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