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PROS Holdings ‘ growth story is only getting stronger, according to Oppenheimer. Industries ranging from airlines to consumer goods already use PROS Holdings’ software to give buyers precise personalized offers. Oppenheimer initiated coverage of the software as a service company (SaaS) in a Wednesday report, assigning it an outperform rating and $37 price target, implying 37% upside from Wednesday’s close. PROS is up about 3.2% in morning trading Thursday. Analyst Brian Schwartz said the company’s AI offerings and patents make it a strong market leader in a competitive environment. “PROS Holdings is an improving profitable growth story and a play on AI-enabled sales optimization solutions for travel and business-to-business commerce. The company has developed and patent-protected a robust set of AI-embedded and purpose-built products across multiple categories,” Schwartz wrote to clients. “With proven execution in its product roadmap, a long runway for EBITDA margin improvements, and clear ownership of specific verticals where network effects are becoming apparent, it looks well-positioned to gain future share in a large, underpenetrated market,” he continued. Schwartz says that the company is already a leading sales optimization name in the travel industry and is nearing an inflection point in profitability. “We estimate PROS Holdings’ market opportunity is $9B+ with only a small portion served by pure-play SaaS vendors,” Schwartz said. He added that he “see[s] a long, profitable growth runway for the most innovative vertical software suppliers, like PRO.” “While PRO trades at a discount to the value tech group and public vertical software peers, if management executes well on the improving profitable growth story, the current valuation gap should narrow over time,” the analyst added. Shares have now gained 15% in 2023, after sliding 30% in 2022. —CNBC’s Michael Bloom contributed to this report.
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