Nuix shares drop as RBC opens coverage with 'sector perform' rating
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The news: Nuix shares slipped in early trading even as RBC Capital Markets initiated coverage on software group with a "sector perform" recommendation.
The numbers: Shares were down 2.4% to $2.22 at 11:20am AEST, having shed 65% since the turn of the year.
RBC opened its coverage of Nuix with a price target of $2.60 per share, a 14.5% uptick from its previous close.
The context: RBC analyst Garry Sherriff said Nuix's software platform, which assists businesses and governments analyse unstructured data, is likely to receive structural tailwinds including rising data volumes, increased regulatory compliance and cybersecurity needs.
However, Sherriff said the company's revenue visibility is limited, with long sales cycles and uncertain deal closure timing seeing FY25 guidance withdrawn in May.
Nuix is currently transitioning its architecture to the cloud and moving to a consumption-based revenue model, the analyst noted, while rival platform Relativity has emerged as a "large, strong competitor" in the market.
The source: RBC Capital Markets research
