On Thursday, Wolfe Research raised its rating on MeridianLink (NYSE:MLNK) to Peer Perform from Underperform. The adjustment comes after the company released preliminary fourth-quarter results that aligned with revenue expectations and exceeded projections for EBITDA. These results were shared in conjunction with a recent secondary offering.
"We view the preliminary results constructively, particularly on adjusted EBITDA, which the company noted was driven by a decrease in COGS and operating expenses," said the analyst.
The company's financial performance in this area was highlighted as a positive indicator of its cost management strategies.
Wolfe Research pointed out that the improved EBITDA did not take into account the potential impacts of a 9% reduction in force (RIF) that MeridianLink announced in January. The firm suggests that there could be additional benefits to the adjusted EBITDA in the coming year as the savings from the workforce reduction are realized.
Despite the encouraging preliminary results, MeridianLink has not provided guidance for the year 2024 alongside the release of these figures. The absence of forward-looking guidance means that investors and analysts will be watching closely for any future announcements that might shed light on the company's expectations for the upcoming year.
InvestingPro Insights
Following Wolfe Research's upgrade of MeridianLink (NYSE:MLNK), a closer look at the financial metrics from InvestingPro reveals additional insights into the company's valuation and performance. With a market capitalization of $5.56 billion and an adjusted price-to-earnings (P/E) ratio for the last twelve months as of Q4 2023 at 10.04, MeridianLink appears to be trading at a low earnings multiple, which could be attractive to value investors.
The company's commitment to shareholder returns is evident, as it has raised its dividend for 3 consecutive years and maintained dividend payments for 20 consecutive years. This consistency is underscored by a recent 20.0% dividend growth and a dividend yield of 1.22%. These InvestingPro Tips suggest that MeridianLink prioritizes returning value to its shareholders.
InvestingPro Data also shows a strong return over the last three months, with a price total return of 30.05%, and the stock is currently trading near its 52-week high, at 98.06% of the peak value. This performance is significant, considering the company's revenue declined by 14.11% in the last twelve months as of Q4 2023.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can provide a comprehensive understanding of MeridianLink's financial health and future prospects. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
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