Morgan Stanley analyst Mauricio Cepeda maintained a Sell rating on Vasta Platform (VSTA – Research Report) today and set a price target of $3.00.
Mauricio Cepeda has given his Sell rating due to a combination of factors impacting Vasta Platform’s financial outlook. The company’s anticipated growth for 2025, as indicated by management, is expected to be 14% year-over-year, which is 2 percentage points below Morgan Stanley’s estimate. This discrepancy suggests potential downside risks in achieving projected growth targets. Additionally, while subscription revenue showed a 20% increase, the core solutions segment underperformed expectations by 2%, and the adjusted EBITDA margin saw a slight decline.
Furthermore, the adjusted net income, although increased by 19%, fell short of Morgan Stanley’s expectations by 14%. The lack of a formal announcement regarding the 2025 Annual Contract Value (ACV) adds uncertainty to the company’s future revenue projections. Despite the renewal of a significant B2G contract and a robust pipeline, the flat average pricing, potentially due to a shift towards non-premium schools, raises concerns about the company’s pricing strategy and overall profitability. These factors collectively contribute to the Sell rating assigned by Mauricio Cepeda.