Perficient, Inc. (PRFT) acquired Uruguay-based Izmul S.A. and its subsidiaries, known as Overactive, a nearshore software development firm, for an undisclosed amount. The acquisition will be immediately accretive to PRFT’s earnings per share. Shares closed at $128.80 on October 15.
Perficient is a global consultancy firm offering digital transformation services to the world’s largest businesses and biggest brands. PRFT’s multi-shore, fully integrated, global delivery approach is a key driver of growth and a compelling differentiator in the market.
Overactive provides innovative and scalable technology solutions to many Fortune 1000 companies across several industries, including the financial services, healthcare, technology, and business services sectors.
The acquisition will expand Perficient’s footprint in Latin America with nearshore software development locations in Colombia, Argentina, Uruguay, and Chile. Overactive has over 700 talented software professionals and will enhance PRFT’s custom software application design, development, testing, and support for customers, as well as accelerate innovation and time to market.
Commenting on the acquisition, Jeffrey Davis, Chairman, and CEO of Perficient said, “With the addition of Overactive, we now have more software and digital development talent offshore than onshore. Our global talent, coupled with our strong U.S. presence, enables our clients to scale quickly, innovate rapidly and reduce costs to better meet rising customer demands, transform their business, and outpace the competition.”
Recently, Alliance Global Partners analyst Brian Kinstlinger lifted the price target on the stock to $125 (2.9% downside potential) from $104. However, the analyst downgraded the stock to a Hold rating from Buy.
While Kinstlinger recently witnessed a bullish run on the stock, with organic growth of around 20% and a strong margin profile, he sees the stock’s current risk/reward profile as unfavorable. He believes PRFT’s rapid growth will continue only in the short run as the company’s size does not allow for continued long-term growth momentum. (See Insiders’ Hot Stocks on TipRanks)
Overall, the stock commands a Strong Buy consensus rating based on 5 Buys and 1 Hold. The average Perficient price target of $121 implies 6.1% downside potential to current levels. Shares have exploded 192.3% over the past year.
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