Seeking Alpha

Ellie Mae upgraded at Dougherty

"We have been cautious on Ellie Mae (ELLI +0.1%) shares this year due to [the] difficult mortgage origination environment and back-end loaded nature of the revenue outlook," says analyst Raghavan Sarathy, but a recent meeting with a confident management has him upgrading to a Buy with $39 price target.

"Further, revenue growth could accelerate next year along with margin expansion as mortgage origination volume stabilizes and expense growth moderates."

The $39 price target represents 25x his team's 2016 non-GAAP EPS estimate, or a price-to-earnings-growth ratio of 0.9x.

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