DA Davidson reduced its price target for Amplitude Inc to $12 from $16 but left its rating at Buy, preserving a recommendation that still implies material upside from the stock's trading level of $7.39. The shares are well below their 52-week peak of $14.88, and third-party fair-value estimates indicate the stock appears slightly undervalued relative to those models.
The broker highlighted several operational positives in its note. Amplitude's fourth-quarter fiscal 2025 revenue and leading indicators came in ahead of expectations, a sign the company is sustaining enterprise traction and building momentum in upselling and cross-selling initiatives. Over the trailing twelve months, revenue increased 14.68% to $343.21 million, and gross profit margin remained robust at 73.99%.
That said, DA Davidson described the company's fiscal 2026 guidance as a conservative starting point. The guidance range lines up with consensus overall, but the firm noted that the assumptions about new business are lower than those in Amplitude's initial 2025 guide, implying a measured posture embedded in the outlook. The broker bases its new price target on a multiple - setting it at three times projected 2026 revenue.
Analysts following the company appear to anticipate a return to profitability in fiscal 2026. Aggregate estimates show an expected earnings-per-share of $0.07 for 2026, reflecting a shift from recent unprofitable periods. The report also noted that two analysts have recently raised their earnings projections for the forthcoming period.
Profitability remains a focal point for market participants. Amplitude's guidance points to a low single-digit non-GAAP operating margin in 2026, which sits well below the 23% median operating margin for software-as-a-service peers that are growing in the 10% to 20% range. That margin gap is central to discussions about the stock's valuation and near-term investor expectations.
On the revenue front, Amplitude's fourth-quarter results exceeded expectations by roughly 2% relative to the midpoint of management's guidance. The company also forecast fiscal 2026 revenue growth of 15% year-over-year, a shade above the consensus growth projection of 14%.
Strategically, Amplitude acquired InfiniGrow, an AI marketing analytics firm. Management and analysts view the purchase as aimed at making analytics more actionable for marketing teams - specifically to help measure, forecast and optimize how marketing efforts translate to revenue.
Analyst reactions have been mixed. Piper Sandler and KeyBanc trimmed their price targets while keeping Overweight ratings, citing sector and margin concerns respectively. Morgan Stanley took an opposite tack, upgrading Amplitude to Overweight and increasing its price target to $16, pointing to potential upside from developments in generative AI. BTIG initiated coverage with a Buy rating, emphasizing Amplitude's leadership in product analytics and the breadth of its platform capabilities. Together these moves reflect a blend of cautiousness and optimism among the sell-side.
Bottom line: DA Davidson's price-target reduction reflects a valuation reset amid improving operational indicators and a strategic acquisition, balanced against conservative new-business assumptions and modest margin guidance for 2026.