The Nitro Software Ltd (ASX: NTO) share price is storming higher for a second day in a row.
In afternoon trade, the document productivity software company’s shares are up 10% to $1.55.
This means the Nitro share price is now up approximately 35% in the space of just two weeks. Though, its shares are still down by the same margin year to date.
Why is the Nitro share price rising?
A number of beaten down ASX tech shares are rising again on Wednesday after another strong night on Wall Street’s tech focused Nasdaq index.
In addition, a recent note out of Goldman Sachs reveals that its analysts believe Nitro’s shares have been severely oversold, creating a buying opportunity for investors. This could be giving its shares an added boost today.
According to the note, the broker has a buy rating and $2.60 price target on its shares. This suggests that there’s still potential upside of 68% for the Nitro share price despite its recent rally.
Commenting in February, Goldman highlighted the favourable risk/reward on offer with its shares after significant weakness in the preceding three months.
It said: “Nitro is down ~50% since November with the market currently pricing in long-term growth and margin assumptions that understate Nitro’s potential, in our view.”
In respect to its growth assumptions, Goldman believes the company can increase its US$34 billion total addressable market penetration from 0.15% to 1.4% by FY 2040. This implies a massive 9x uplift to Nitro’s current revenue base.
The post Why the Nitro (ASX:NTO) share price is jumping 10% appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Goldman Sachs. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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