Amplitude (AMPL) Stock Forecast & Price Target

Amplitude Inc. demonstrates a solid financial profile, highlighted by a deferred revenue increase of 7% year-over-year, reaching $109.7 million. The company has successfully expanded its large customer base, with 42 clients each contributing over $1 million in annual recurring revenue (ARR), reflecting an 8% year-over-year growth, alongside a significant increase in large customers since FY21/FY22. Moreover, with net revenue retention at 100% and a growing number of customers utilizing multiple products, Amplitude's new go-to-market strategy appears to be enhancing revenue efficiency and customer engagement.

Amplitude Inc is facing a negative outlook partly due to a projected 30% drop in Net New Annual Recurring Revenue (NNARR) for FY25, which indicates potential struggles in maintaining customer relationships and revenue growth, despite improvements in gross and net retention rates. Additionally, customer acquisition costs remain at a high ratio of 5.9x, with expectations for only a modest reduction, suggesting challenges in efficiently acquiring new customers while adapting to a changing post-COVID market landscape. Furthermore, the company's reliance on usage-based contracts may lead to significant down-selling upon renewal, as many contracts were initially based on overly optimistic user metrics, exacerbating the impact of reduced marketing budgets and ultimately diminishing overall revenue potential.