Analyst Derrick Wood of TD Cowen maintained a Hold rating on Rimini Street, boosting the price target to $6.00.
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Derrick Wood’s rating is based on a combination of factors surrounding Rimini Street’s recent legal settlement with Oracle. The confidential agreement between the two companies resolves the Rimini II litigation, with Oracle agreeing to return a significant portion of the attorney fees previously paid by Rimini Street. This settlement is seen as a positive development, as it removes a major litigation risk that has been affecting Rimini Street’s stock.
Despite this positive turn, Rimini Street’s decision to wind down its PeopleSoft business will result in a loss of approximately $30 million in annual revenue, which constitutes about 7% of its total revenue. However, the company is focusing on other growth areas such as VMware support and partnerships with companies like ServiceNow and Workday. These strategic moves, along with the removal of litigation costs, provide a clearer path forward. Consequently, the price target for Rimini Street has been raised, but the Hold rating reflects the balance between these positive developments and the anticipated revenue challenges.
Wood covers the Technology sector, focusing on stocks such as Oracle, ServiceNow, and Microsoft. According to TipRanks, Wood has an average return of 13.4% and a 58.06% success rate on recommended stocks.