Acquisition Overview - Smartsheet, an enterprise work management software platform, will be acquired by Blackstone and Vista Equity Partners in an all-cash deal valued at $8.4 billion, with shareholders receiving $56.50 per share, representing a 41% premium over the stock's average closing price for the past three months [1] Involved Parties - Vista Equity Partners, co-founded by billionaire Robert F. Smith, specializes in enterprise software deals and manages over $100 billion in assets [2] - Blackstone, the world's largest private equity firm, has more than $1 trillion in assets [2] Investor Insights - Eminence Capital, managed by Ricky Sandler, is the largest hedge fund holder of Smartsheet, with 4.3 million shares as of the latest filing for Q2, representing the fund's sixth largest holding [3] - Eminence began acquiring Smartsheet shares in the second half of 2022 at around $34 each, increasing its position to 4.3 million shares with an average purchase price of about $36 per share [4] Financial Impact - With the acquisition price of $56.50 per share, Eminence Capital stands to gain approximately $90 million, reflecting a 60% increase in value over two years [4] Historical Context - This acquisition is not the first for Eminence Capital; the fund was also the largest hedge fund owner of Keurig Green Mountain during its acquisition by JAB Capital in 2015 at a 78% premium [5]

Core Viewpoint - Smartsheet (NYSE: SMAR) is considered a strong investment opportunity due to its growth, operational quality, cash flow, and capital return, attracting interest from private equity firms for a potential acquisition valued at $8 billion, which would represent a nearly 10% premium over current market prices [1] Company Overview - Smartsheet is a cloud-based SaaS company specializing in workflow and project management, serving nearly 85% of the Fortune 500 and 90% of the Fortune 100 [1] - The company reported Q2 revenue of $276.6 million, reflecting a 17% year-over-year increase, and subscription revenue grew by 19% [2][3] Financial Performance - Smartsheet achieved a 17% increase in Annual Recurring Revenue (ARR) and a 113% net retention rate, indicating sustained growth [3] - The adjusted margin improved by 800 basis points to 16%, resulting in a GAAP profit of $0.06 and adjusted EPS of $0.44, which exceeded consensus estimates by 5000 basis points [4] - Free cash flow reached a record $57.2 million, representing 21% of revenue, with expectations for continued strength [4] Guidance and Analyst Sentiment - The company provided cautious guidance, expecting year-over-year revenue growth to slow to 15% to 16%, which analysts view as a manageable target [6] - Following the earnings report, 80% of analysts raised their price targets, indicating a potential additional upside of 4% to 5% [7] - The stock is currently rated as a "Moderate Buy" with a price target of $55.06, suggesting a 6.3% upside from current levels [5] Technical Analysis - The stock is showing signs of breaking out from a consolidation range, with potential targets suggesting a price above $100 if the breakout occurs [8]

Core Insights - Smartsheet (SMAR) shares have outperformed its peers, with a 5.4% increase compared to Asana's 10.3% decline and a 2.2% drop in the broader sector over the past month [1] Group 1: Financial Performance - In Q2 of fiscal 2025, Smartsheet's enterprise segment saw significant growth, with 75 customers increasing annual recurring revenue (ARR) by over $100,000 and three transactions exceeding $1 million, including one over $4 million [2] - Smartsheet ended the quarter with an ARR of $1.093 billion and over 15.3 million users, reflecting a 17% year-over-year growth [3] - For Q3 of fiscal 2025, Smartsheet expects revenues between $282 million and $285 million, indicating a year-over-year growth of 15-16% [8] Group 2: Product Development and Innovation - The adoption of AI tools has significantly increased, with a 50% sequential growth in Q2 2024, helping 47,000 users save an estimated 1 million hours [4] - Smartsheet introduced a new Kanban-style board view in Q2, enhancing task visibility for customers [5] - The company implemented Amazon Q Business, a generative AI-powered assistant, to improve knowledge management and productivity [6] Group 3: Customer Acquisition and Partnerships - Smartsheet achieved notable expansions and new customer acquisitions in Q2, including Intuit, Skechers, and City National Bank, showcasing its enterprise readiness [7] - Key partnerships with Amazon and Alphabet have been significant growth drivers, enhancing workplace productivity through integrations with Google Apps for Work [5][6] Group 4: Valuation and Market Position - Smartsheet's stock is considered to have a stretched valuation, with a forward Price/Sales ratio of 7.14X compared to the sector's 3.11X [9] - The company currently holds a Zacks Rank of 3 (Hold), suggesting a cautious approach for potential investors [9]

Core View - Smartsheet (NYSE: SMAR) is rated as a buy due to its strong competitive position and potential for growth exceeding 20% in the foreseeable future, despite some recent performance weaknesses in 2Q25 [2][3] Earnings Results Update - In 2Q25, Smartsheet reported total revenue of $276.4 million, a 17% increase year-over-year, surpassing management's guidance and consensus estimates [3] - Gross margin improved by 70 basis points year-over-year to 84.3%, while EBIT margin expanded by 820 basis points year-over-year to 16.4%, exceeding consensus expectations [3] - Net income reached $61.6 million with an adjusted EPS of $0.44 [3] Positive Takeaway on Growth - Smartsheet remains a dominant player in the enterprise space, with customers generating over $100k in annual contract value (ACV) growing by 23% year-over-year [4] - The company secured three large contracts exceeding $1 million in ACV, indicating strong demand [4] - The enterprise dollar-based net retention rate (DBNRR) remains around 120%, and revenue from Capabilities constituted 35% of subscription revenue, reflecting a 30% year-over-year growth [4] - The transition to a new pricing model is on track, with positive early adoption signs from new customers [4] Negative Points to Monitor - Annual recurring revenue (ARR) growth slowed to 17% in 2Q25 from 19% in 1Q25, and gross churn increased slightly to 4.5%, leading to a decline in overall DBNRR to 114% [6] - The small and medium-sized business (SMB) customer segment is under pressure, with DBNRR for this cohort falling below 100%, which may hinder overall growth [7] Valuation and Takeover Interest - Reports indicate that Vista Equity and Blackstone are in discussions to acquire Smartsheet for $7 billion, which could provide a valuation floor [8] - The target price for Smartsheet is estimated at $75.13, representing a 47% upside from the current share price of $51.21 [14] Conclusion - Despite macroeconomic pressures affecting the SMB segment, Smartsheet's growth potential remains solid, with expectations of returning to over 20% growth in the future, supported by strong performance in the enterprise space and takeover interest [13]

Smartsheet (SMAR) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. Analysts' growing optimism on the earnings prospects of this maker of a cloud-based work-management platform is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estima ...

Smartsheet stock is surging after its Q2 report, and investors are betting a buyout could be on the horizon. Smartsheet (SMAR 7.01%) stock is posting big gains in Friday's trading. The productivity and collaboration software specialist's share price was up 5.8% as of 12:30 p.m. ET, according to data from S&P Global Market Intelligence. Smartsheet stock is climbing after the company published better-than-expected results for the second quarter of its 2025 fiscal year (which ended July 31). Today's bullish mo ...

Shares of Smartsheet (SMAR) have been strong performers lately, with the stock up 8.5% over the past month. The stock hit a new 52-week high of $51.42 in the previous session. Smartsheet has gained 3.2% since the start of the year compared to the 16.5% move for the Zacks Computer and Technology sector and the 13.4% return for the Zacks Internet - Software industry. What's Driving the Outperformance? The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estim ...

Smartsheet Inc. SMAR posted better-than-expected second-quarter financial results and raised its FY25 EPS outlook on Thursday. Smartsheet reported quarterly earnings of 44 cents per share which beat the analyst consensus estimate of 29 cents per share. The company reported quarterly sales of $276.41 million which beat the analyst consensus estimate of $274.19 million. "Q2 was a strong quarter highlighted by continued growth in the enterprise," said Mark Mader, CEO of Smartsheet. "Our customers are scaling t ...

Core Viewpoint - Smartsheet (SMAR) reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, and showing significant growth from $0.16 per share a year ago, resulting in an earnings surprise of 51.72% [1] Group 1: Earnings Performance - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] - Smartsheet's revenues for the quarter ended July 2024 were $276.41 million, exceeding the Zacks Consensus Estimate by 0.86% and up from $235.59 million year-over-year [2] Group 2: Stock Performance and Outlook - Smartsheet shares have declined approximately 1% year-to-date, contrasting with the S&P 500's increase of 15.7% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] Group 3: Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $284.42 million, and for the current fiscal year, it is $1.26 on revenues of $1.12 billion [7] - The Internet - Software industry, to which Smartsheet belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Smartsheet Inc (SMAR) is slated to report second-quarter fiscal 2025 results on Sept. 5. For the fiscal second quarter, SMAR expects revenues in the range of $273-$275 million, suggesting 16-17% year-over-year growth. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $274.06 million, indicating a rise of 16.33% from the figure reported in the year-ago quarter. The consensus estimate for fiscal second-quarter earnings is pegged at 29 cents per share, unchanged in the past 30 days. ...