Couchbase’s Strong ARR Growth and Strategic Investments Drive Buy Rating Despite Customer Churn Concerns

In a report released today, Mike Cikos from Needham maintained a Buy rating on Couchbase (BASE – Research Report), with a price target of $22.00.

Mike Cikos has given his Buy rating due to a combination of factors including Couchbase’s impressive addition of $14.2 million in net-new Annual Recurring Revenue (ARR), which highlights the company’s ongoing strong performance. This growth is attributed to the scaling of Capella’s contributions and the positive impact of investments in Strategic Account Teams. Furthermore, Couchbase is benefiting from robust trends in both the development of new applications and the transition of existing applications to production environments.
Despite some concerns about a quarter-over-quarter revenue decline and a decrease in total customers due to churn among starter-pack users, management emphasizes ARR as the key performance indicator. This focus suggests confidence in the company’s long-term growth prospects, as starter-packs play a crucial role in the initial stages of customer acquisition.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $22.00 price target.