WalkMe’s Focus On Enterprise Customer Will Drive Profitability, Analyst Says

• Needham analyst Scott Berg reiterated a Buy On WalkMe Ltd (NASDAQ: WKME) with a $20 price target.

• WalkMe reported a solid 3Q22 with a modest revenue upside, a more robust gross margin, and operating expenses below his expectations.

• While net new ARR was lower than in recent quarters, the company strengthened by landing four >$1 million ARR customers during the quarter.

• DAP ARR growth exceeded 60%, and G2K customer expansion was up almost 10% YTD.

• WKME reiterated its goal of positive FCF by the end of FY23. The company’s focus on the Enterprise customer segment will help drive profitability as they improve sales efficiency and build a more robust partner-driven GTM motion.

• The 4Q22 guidance reflects macro headwinds and the elongation of sales cycles.

• However, WKME’s demand pipeline looks healthy, and we are optimistic about the company’s ability to improve execution into next year.

• Price Action: WKME shares traded lower by 1.16% at $8.93 on the last check Wednesday.

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