- Grid Dynamics Holdings Inc (NASDAQ:GDYN) provided a positive update on its current operations and business continuity efforts in response to the conflict in Ukraine.
- Needham analyst Mayank Tandon noted the critical takeaway from the update being a higher revenue guide.
- The 1Q22 outlook now called for $65 million+ in revenue, is well above the prior range of $55 million - $60 million.
- The company continues to hire staff in Western Ukraine, relocate existing employees to other regions of the world, and organically add staff in Central Europe, the US, Mexico, and India.
- Tandon was impressed with management's ability to quickly diversify their delivery and outperform their guidance in the face of the impact on their operations from the ongoing conflict.
- Tandon raised its outlook for 1Q22, FY22, and FY23, reiterating its Buy rating and raising the price target to $25 (55.1% upside) from $22.
- Tandon saw the recent sell-off as overdone, especially in light of the robust demand environment, management's aggressive efforts to shift work away from Ukraine/ramp hiring in other regions, and the company's rock-solid balance sheet.
- Tandon saw the growth and margins pressured over the next few months, followed by a sharp recovery once headcount ramps in other regions and tensions eventually ease in Eastern Europe.
- Price Action: GDYN shares traded higher by 5.82% at $15.92 on the last check Thursday.
