Raymond James downgraded Weave Communications Inc. to Market Perform from Outperform after Francisco Partners agreed to acquire the cloud-based communications firm for $650 million in cash, valuing shares at $7.40 each.
The analyst, Alexander Sklar, cited minimal scope for further upside given the transaction's structure and timeline. Weave's stock, which closed at $7.29 on Friday, has traded within a narrow band around the offer price since the deal was announced, reflecting limited investor expectations of a higher bid.
The acquisition, expected to finalize in the fourth quarter of 2026, represents a 34% premium over Weave's pre-announcement share price. The company reported $257.79 million in revenue for its latest fiscal year, up 16.73% year-over-year, though the deal price implies a valuation of roughly two times Raymond James' 2027 sales projection.
Stifel adjusted its target price to $7.40 from $8.00 and maintained a Hold rating, estimating an enterprise value-to-revenue multiple of 1.8 times and an enterprise value-to-free cash flow multiple of 15.7 times by 2027. B.Riley initiated coverage with a Buy rating and a $8.25 target, citing a discount to peer valuations. Loop Capital also downgraded Weave to Hold from Buy following the announcement.
InvestingPro's fair value estimate for Weave stands at $7.81, above the acquisition price but below pre-deal market levels. The transaction will delist Weave from the New York Stock Exchange, transitioning the company to private ownership upon completion.
