In a report released yesterday, Michael Funk from Bank of America Securities reiterated a Hold rating on Bentley Systems (BSY – Research Report), with a price target of $50.00.
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Michael Funk has given his Hold rating due to a combination of factors influencing Bentley Systems’ stock. The company reported strong first-quarter results with subscription revenue and operating margin exceeding expectations. Additionally, the annual recurring revenue growth surpassed the full-year guidance, which is a positive indicator in the current economic climate. Despite these encouraging results and the company’s robust demand and defensive business model, the stock’s high valuation compared to its peers makes the risk and reward balanced.
Furthermore, while Bentley Systems benefits from positive trends such as infrastructure spending and a shortage of engineering talent, the premium valuation at 36 times the estimated free cash flow for 2026 compared to peers at 26 times suggests caution. The company’s durable business model and consistent revenue retention are positive, but the premium multiple justifies a neutral stance. Therefore, the Hold rating reflects the balanced outlook between strong growth prospects and valuation concerns.
Funk covers the Technology sector, focusing on stocks such as Autodesk, CCC Intelligent Solutions Holdings, and Box. According to TipRanks, Funk has an average return of -8.8% and a 37.70% success rate on recommended stocks.