Analysts at Barclays Initiated Coverage on Magic Software Enterprises (MGIC) with an “Equal Weight” rating and price target of $9.

“We launch coverage on Magic Software with an Equal Weight rating and a USD9 price target. MGIC derives its revenues from the platform-as-a-service (PaaS) business (40% of revenues), the IT consulting and staffing business (60%). The PaaS are application development and deployment tools that significantly reduce time to market for its customers. The PaaS products open the door to longer recurring revenue opportunities in the consulting business” Barclays said in a note to clients.

“We believe that it is an under-owned, under-recognised software company that is operating in application development, which has a TAM of $9.4bn and the IT services market with a TAM of $922bn. Trading on a 2015e P/S multiple of 2.19x and a PE of 14.x we  believe that there is upside in the stock after the recent follow-on offering.” it added

Shares of Magic Software Enterprises (MGIC) closed at $8.53 on Monday.

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