Software sentiment and valuations have rebounded quarter to date, but investors remain cautious about fundamentals, particularly among small-cap SaaS companies, according to Oppenheimer analyst Ken Wong. The firm has also observed greater merger and acquisition interest alongside increased software deal activity.
Oppenheimer says some companies continue to face macroeconomic pressure and organizational changes, while others are entering the third-quarter earnings season with stronger demand and substantial sales pipelines.
Docebo is viewed positively, supported by an unfilled share issuer bid and expectations that momentum from the second half of the year will continue into the third quarter. Oppenheimer said confidence is growing that federal contracts will materialize in the second half, with a significant pipeline ahead of the seasonally strong quarter.
Investors expect Docebo’s revenue to come in slightly above the high end of its third-quarter forecast, which ranges from $69.5 million to $69.7 million. Any upside could benefit EBITDA, although product and go-to-market investments launched in the second half may limit earnings-per-share gains. Oppenheimer raised its price target for the company to $35 from $25 and said management could shift its focus toward share buybacks after limited participation in the previous share issuer bid.
BILL Holdings has a cautiously positive outlook, although concerns remain about macroeconomic pressure on spending by small and medium-sized businesses and possible disruption from recent restructuring. Investor expectations are relatively low, with the market looking for roughly a one-point revenue beat against consensus of $439 million and conservative guidance.
The analyst said investors are still assessing the potential impact of workforce optimization, turnover among financial institution partners, and volatility in sales and engineering. Oppenheimer expects BILL’s take rate to be flat or slightly higher quarter over quarter. Investors are also anticipating EBIT of $115 million and earnings per share of $0.98 after the workforce reduction, although plans to reinvest approximately $30 million could constrain upside.
SimilarWeb is benefiting from increasingly positive sentiment, driven by greater confidence in its large-deal pipeline and enthusiasm surrounding artificial intelligence. Oppenheimer said improving revenue trends and AI-related developments have not yet resulted in margin pressure from AI costs.
Investors expect SimilarWeb to exceed revenue expectations toward the upper end of its $80.5 million-to-$82.5 million guidance range, compared with Wall Street consensus of $81.7 million. The firm said a top-line surprise would largely flow through to margins and EBIT. Investors also expect management to narrow the lower end of its fiscal 2026 revenue outlook, with the possibility of raising the upper end.
Sources: Investing.com News.