TD Cowen has reduced its price target for Procore Technologies, Inc (NYSE:PCOR) to $80.00 from $90.00 but maintained a Buy rating on the construction software provider. The firm projects that Procore will deliver a revenue beat for the fourth quarter and will provide fiscal year 2026 guidance that is in line with consensus expectations.
In its modelling, TD Cowen assumes fourth-quarter contracted remaining performance obligations (cRPO) will increase by 19%. The analyst described the expected outperformance as a combination of mid-teens normalized growth plus a moderating duration tailwind versus tougher year-ago comparisons.
Those assumptions sit alongside Procore’s recent growth history and forecasts. The company has reported a five-year revenue compound annual growth rate (CAGR) of 32%, and current estimates call for revenue to expand by 14% in the current fiscal year.
Despite the anticipated top-line strength, TD Cowen cited softer sector valuations as the primary reason for trimming its price target. The firm also noted investors’ interest in additional commentary from Procore’s new chief executive officer, Ajei Gopal, who is viewed favorably by market participants.
Market performance metrics highlight Procore’s recent weakness. According to InvestingPro data referenced by the analyst, Procore’s stock has declined 27.45% over the past year and is trading close to its 52-week low. Year-to-date, shares are down 22.2%, versus a 15% drop in the iShares Expanded Tech-Software Sector ETF (IGV).
TD Cowen characterized Procore’s valuation as relatively attractive on several forward-looking bases. The firm presented an approximate multiple of 5x enterprise value to calendar year 2027 estimated sales, and about 25x enterprise value to free cash flow assuming mid-teens growth. Technical indicators also point to depressed sentiment; InvestingPro analysis mentioned a relative strength index (RSI) that indicates oversold territory.
On fundamentals, TD Cowen emphasized Procore’s strong gross margins, which remain at 79.8%, underscoring the resilience of the company’s business model even amid industry headwinds. The firm sees limited downside risk from artificial intelligence disruptions, stating that Procore operates as a complex, mission-critical system where AI-related threats appear limited.
TD Cowen’s sector commentary pointed to continued sluggishness in non-residential construction spending and weak readings on the Associated Builders and Contractors’ bookings indicator. The firm did note an exception for larger contractors, where spending is comparatively stronger due to activity in data center projects.
Operational and corporate developments for Procore cited by the analyst and company updates include several recent items:
- Procore’s Procore for Government product has obtained FedRAMP Moderate Authorization, enabling U.S. federal agencies and their contractors to manage construction projects while meeting Cybersecurity Maturity Model Certification Level 2 obligations for Department of Defense contractors.
- Procore has acquired Datagrid to bolster its artificial intelligence capabilities; financial terms of the transaction were not disclosed.
- Analyst actions include Barclays upgrading Procore from Equalweight to Overweight, citing a positive view on U.S. non-residential construction. Stifel reiterated its Buy rating and maintained an $85.00 price target after discussions with CEO Ajei Gopal.
- Board-level change: Ronald Hovsepian was appointed to Procore’s board of directors following the voluntary resignation of Brian Feinstein; the company confirmed Feinstein’s departure was not due to any disagreement with management.
TD Cowen highlighted Procore’s balance sheet strength, noting the company has more cash than debt. The firm expects investors will look to the company’s next earnings release for further clarity; Procore’s upcoming report is due on February 12th.
While TD Cowen trimmed the price target to reflect broader sector valuation pressure, the analyst retains a constructive stance on the company’s near-term operational trajectory, driven by modeled cRPO growth and a forecast revenue beat. Investors interested in deeper analysis can consult the comprehensive Pro Research Report available for PCOR and a broad universe of other U.S. stocks via InvestingPro.
Contextual note: The market backdrop shows Procore underperforming broader software-focused benchmarks, even as the company preserves robust gross margins and expects continued top-line momentum. The near-term outlook hinges on the upcoming earnings release and further commentary from new CEO Ajei Gopal.