What Happened?
Shares of cloud software provider Upland Software (NASDAQ: UPLD) jumped 3.3% in the morning session after Needham & Company upgraded the stock to a Buy from a Hold rating.
The upgrade from Needham & Company LLC also came with a $4.50 price target on the software maker's stock. This move reflects a more optimistic view from the analyst firm on the company's future performance. Adding to the positive sentiment, another research firm, Craig Hallum, had also recently raised its rating on Upland Software. It upgraded the shares from a “hold” rating to a “buy” rating and established a $3.50 price target, signaling growing confidence from market analysts.
After the initial pop the shares cooled down to $2.97, down 0.7% from previous close.
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What Is The Market Telling Us
Upland Software’s shares are extremely volatile and have had 66 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 17.7% on the news that its board of directors approved a stock repurchase program to buy back up to $10 million of its outstanding common stock. The buyback authorization, which represents nearly 19% of Upland's current market capitalization, was seen by investors as a strong vote of confidence from management. This move comes after the stock has declined over 60% in the past six months, suggesting the board believes the shares are undervalued. The company's decision to deploy capital on repurchases, announced in an 8-K filing, was particularly noteworthy as it followed a recent second-quarter earnings report that missed analyst estimates. The program does not have a specified expiration date.
Upland Software is down 33.7% since the beginning of the year, and at $2.97 per share, it is trading 44.1% below its 52-week high of $5.31 from December 2024. Investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at an investment worth $82.48.
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