Slack stock gains after MKM initiates at buy

Slack Inc. shares

WORK, +0.98%

are up 3.2% in premarket trading Thursday after MKM Partners analyst Rohit Kulkarni initiated coverage of the stock with a buy rating and $40 target. “As more organizations digitize workflows, Slack’s value proposition becomes even more compelling as a means to connect employees, applications, and data,” Kulkarni wrote. While he said the company’s valuation “isn’t for the faint-hearted,” he also pointed out that Slack’s stock trades “at a discount on a growth-adjusted basis to SaaS stalwarts and up-and-comers such as Atlassian

TEAM, +1.22%,


OKTA, +4.05%,


CRWD, -2.60%

and Zoom

ZM, +1.75%.

” He noted that Slack’s stock won’t be subject to the usual “downward pressure” that comes from post-IPO lockup expiration since the company opted for a direct listing. Slack shares have dropped 7.4% over the past month, as the S&P 500

SPX, +0.82%

has fallen 2%.

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