Freshworks, GoDaddy, ServiceNow among SaaS software price target cut at Morgan Stanley on slowing demand

With increased evidence of a slowing demand environment, Morgan Stanley has cut price targets across its SaaS software stock coverage and 2022/2023 revenue estimates by 1%/3% ahead of a potential “downtick in growth outlook”.

Morgan Stanley has reduced 2022 billings estimates by 2% on average to account for risk in 2H and leveraged recent analysis to assess the recession risk in SaaS which points to a 2.5-4 point annual headwind to total growth rates for every 10 point headwind to growth in new demand.

Let's take a look at the list of the Morgan Stanley PT cuts:

• HubSpot (HUBS) PT cut to $436 from $539 with an "overweight" rating. PT indicates a potential upside of 61.46% from the stock's previous close.
• Freshworks (FRSH) PT cut to $17 from $23 with an "equal weight" rating. PT indicates a potential upside of 33.12% from the stock's previous close.
• GoDaddy (GDDY) PT cut to $91 from $95 with an "equal weight" rating. PT indicates a potential upside of 27.61% from the company’s current price.
• ZoomInfo Technologies (ZI) PT cut to $66 from $81, indicates a potential upside of 86.81% from the company's current price
• Vertex (VERX) PT cut to $10 from $12 with an "underweight" rating. PT indicates a potential downside of 4.85% from the stock's previous close.
• ServiceNow (NOW) PT cut to $575 from $594 with an "overweight" rating. PT indicates a potential upside of 38.77% from the stock's current price.
• Qualtrics (XM) PT cut to $18 from $43, indicates a potential upside of 43.08% from the company's current price.
• BigCommerce Holdings (BIGC) PT cut to $19 from $21 with an "equal weight" rating. PT indicates a potential upside of 4.00% from the stock's current price.
• Amplitude (AMPL) PT cut to $18 from $23 with an "equal weight" rating. PT indicates a potential upside of 22% from the stock's current price.
• LegalZoom.com (LZ) PT cut to $12 from $13 "equal weight" rating. PT indicates a potential upside of 23% from the stock's current price.
• Matterport (MTTR) PT cut to $5 from $6 with an "equal weight" rating. PT indicates a potential upside of 30.89% from the stock's current price.
• Liveramp Holdings (RAMP) PT cut to $38 from $41 with an "overweight" rating. PT indicates a potential upside of 42.38% from the stock's current price.
• Sprout Social (SPT) PT cut to $66 from $70, indicates a potential upside of 18.77% from the stock's current price.
• UserTesting (USER) PT cut to $9 from $11, indicates a potential upside of 59.29% from the company's current price.
• Wix.Com (WIX) PT cut to $77 from $85 with an "equal weight" rating. PT indicates a potential upside of 24.11% from the company's current price.
• Zeta Global Holding (ZETA) PT cut to $6.50 from $9.50 with an "equal weight" rating. PT indicates a potential upside of 46.72% from the company's current price.