Here's Why TaskUs Stock Popped Today
Shares of customer-service company TaskUs (NASDAQ: TASK) popped by as much as 10% Tuesday morning after an analyst initiated coverage of the stock with a buy rating. Given that it's down 65% year to date, its shareholders are surely happy to get a little reprieve. As of 11 a.m. ET, TaskUs stock was up 7%.
According to The Fly, Citi analyst Ryan Potter cited a "steep valuation discount" as one reason for his buy rating on TaskUs. He also gave it a price target of $28 per share, about 45% higher than where it trades right now. Granted, Potter's price target is merely his opinion. But TaskUs is a small-cap company, and lightly traded, so when someone as prominent as Potter shares such a strong positive opinion about it with investors, it can move the stock.
To Potter's point regarding valuation, I agree that TaskUs stock does look inexpensive now. It trades at a price-to-sales valuation of just 2, which is a typical ratio for a low-growth business. TaskUs, however, is still growing rapidly, as the following chart shows.
Source Fool.com