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Compass Point adds fintech, software analysts

Compass Point Research and Trading has hired two analysts to broaden its coverage of the fintech and software sectors.

Marshall Senk started at the company in late May, covering several software companies. Amazon.com Inc., Alphabet Inc.'s Google LLC, and Microsoft Corp. are doing work with public cloud services, Senk said in an interview. It is a multi-year process, but Senk is shifting his coverage now to stay ahead of the game, he said.

He recently initiated coverage of Q2 Holdings Inc. with a "buy" rating and a $105 price target, saying the banking market is "ripe for disruption." Q2 is the leading cloud provider of digital banking solutions and has a platform that covers both the digital front and back office.

"Banks are feeling the pressure to offer digital engagement as branch traffic dwindles and customer expectations for expediency and convenience continue to move higher," Senk wrote in his Aug. 12 note.

The analyst said Q2 is "proving it can cross and upsell" its new offerings. Senk believes the company is positioned to sustain top-line organic growth in the mid-20% range for the next several years.

Senk previously covered software at Rosenblatt Securities. Rosenblatt has since hired a new software analyst, Yun Kim, who recently launched coverage of Manhattan Associates Inc. at a "buy" rating.

Compass Point also hired Michael Del Grosso, who started at the company in late July. Del Grosso previously covered payments companies at Jefferies Financial Group Inc. and plans to focus again on the payments space at Compass Point. Jefferies did not respond to a request for comment about its payments coverage.

In February, Compass Point dropped coverage of seven consumer and specialty finance companies when Michael Tarkan left the firm. According to FINRA's BrokerCheck website, Tarkan has not yet started with another company.