Equity Research

Amplitude, Inc.: Initiation of Research Coverage

William Blair initiated research coverage of Amplitude, Inc. (AMPL $66.69), a provider of digital optimization software.

Analysts Bhavan Suri and Arjun Bhatia estimated the company to generate revenue of $161 million in 2021 and $226 million in 2022. They noted that Amplitude grew total revenue 50% in 2020, and growth accelerated to 57% year-over-year in the first half of 2021.

“Architected for speed and flexibility, Amplitude’s proprietary behavioral graph provides real-time, interactive, self-serve product analytics,” Suri said. “Its platform was built from the ground up to handle the scale and complexity of digital products. The behavioral graph is the core of the platform, and its robust artificial intelligence and machine learning capabilities power predictive analytics and personalization at scale across Amplitude’s products. We believe the platform’s ability to generate meaningful insights and take relevant action separates it from competitors. Nearly 1,300 customers use Amplitude in over 45,000 digital products to understand better what drives end-user behavior and which product investments would maximize customer lifetime value and drive product-led growth.”

Bhatia said, “As a single product company, Amplitude has achieved strong growth. However, we believe the launch of two new products during the quarter, Amplitude Experiment and Amplitude Recommend, position the company well to drive growth across its customer base, as each can provide an up to a 100% annual contract value uplift over the core Analytics product when adopted. In our view, the rise of e-commerce and prevalence of disruptive, digitally native companies has created pressure on legacy industries to compete in a digital-first world and provide long-term tailwinds for Amplitude.”

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Current Ratings Distribution (as of 10/24/21)

Coverage Universe
Outperform (Buy): 76%
Market Perform (Hold): 23%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 31%
Market Perform (Hold): 12%
Underperform (Sell): 0%

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