According to Morgan Stanley, a little-known software company can bring investors up to 35% growth. The Bank of Wall Street wrote in a note on Monday that Model N, a 24-year-old software provider to pharmaceutical and semiconductor companies, could experience “the next wave of growth.” Morgan Stanley began research on the Model N with an investment grade of excellence and a price target of $43. Model N is down over 19% in 2023 after jumping 35% in 2022. [competitors]’ wrote Craig Hettenbach, an equity analyst at Morgan Stanley. Model N, which went public 10 years ago this month, has an “attractive mix of short-term protective performance and long-term growth drivers” thanks to a solid list of pharmaceutical clients. Model N software will play an important role in companies determining their best pricing strategy once the Centers for Medicare and Medicaid services begin price negotiations for expensive drugs starting in 2026, Hettenbach said, Hettenbach said. Morgan Stanley also noted potential downside risks. model N, given the need to switch 30% of the remaining customers to software as a service, exposure to a deeper-than-expected 15% drop in sales in the semiconductor industry, fierce competition from companies with better access to more resources, and the need better control of equity-based compensation.
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