Morgan Stanley was surprised by SiteMinder's accelerated timeframe to free cash flow, as it has guided to positive in the second half of FY24. As a result the broker lifts revenue estimates and expects improved operating leverage in FY24-25.

Morgan Stanley believes the announcement de-risks the bear case, in terms of balance-sheet risks. This results in an increase in the target to $4.00 from $2.90.

Traction on further product expansion is required to sustain top-line growth, in the broker's view, and an Equal-weight rating is maintained. Industry view is In-Line.

Sector: Software & Services.

Target price is $4.00.Current Price is $4.29. Difference: ($0.29) - (brackets indicate current price is over target). If SDR meets the Morgan Stanley target it will return approximately -7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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