EverCommerce (EVCM) Stock Forecast & Price Target

EverCommerce Inc. demonstrated a strong financial performance with a 7.0% year-over-year revenue increase when excluding divested fitness assets, with total customers rising to 740,000, indicating a growth rate of 5% in reported terms and over 7% in pro forma terms. Notably, payment revenue grew by 9% year-over-year, driven by a significant total payment volume (TPV) growth of 9% to $12.6 billion, marking an acceleration in payments revenue growth throughout 2024. Pro forma subscription and transaction revenue growth also improved to 8.9%, combined with expectations for substantial growth from its core EverPro and EverHealth segments, suggesting positive momentum for future revenue and margin expansion.

EverCommerce Inc faces significant financial challenges that contribute to a negative outlook for its stock, primarily due to anticipated declines in revenue growth and margins, which could lead to a discounted enterprise value/sales multiple relative to peers. A downside scenario, projecting a $7 price level by 2025, hinges on a 500 basis point reduction in revenue growth, exacerbated by a decrease in technology spending and difficulties in customer expansion and cross-selling initiatives. Furthermore, the recent divestiture of the MarTech segment has resulted in lowered revenue and growth estimates, while the company remains vulnerable to economic sensitivities among its SMB clientele and increasing competitive pressures in its market verticals.