What Happened?
Shares of digital outsourcing company TaskUs (NASDAQ:TASK) jumped 5.5% in the morning session after Baird upgraded its rating on the stock to Outperform from Neutral and set a price target of $18.
The upgrade came after the company's shares had declined approximately 20% since a founder-led take-private transaction failed to secure the necessary votes. Baird cited the company's growth rate as a key factor in its decision, describing TaskUs as "one of the fastest growing of the CX firms" with 22-24% year-over-year growth. The research firm also pointed to the stock's current valuation. Additionally, Baird suggested the possibility that the buyer group might return with an improved offer of $17-19 per share in the coming quarters if the stock price remained around its current levels.
After the initial pop the shares cooled down to $13.68, up 3.3% from previous close.
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What Is The Market Telling Us
TaskUs’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 5.7% on the news that the company announced the mutual termination of its merger agreement with Breeze Merger Corporation, an entity connected to Blackstone. The decision was made after the proposal failed to get the needed approval from TaskUs stockholders at a special meeting. This news extended the stock's decline from the previous trading session when the shares had already fallen sharply. An 8-K filing confirmed the merger was called off, and neither company had to pay a termination fee. The failure of the planned sale created uncertainty among investors about the company's path forward, prompting the negative reaction in the market.
TaskUs is down 19% since the beginning of the year, and at $13.68 per share, it is trading 27.8% below its 52-week high of $18.94 from November 2024. Investors who bought $1,000 worth of TaskUs’s shares at the IPO in June 2021 would now be looking at an investment worth $439.98.
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