LogMeIn's LastPass Acquisition Gives Investors More Gains

Cowen's Gregg Moskowitz maintained an Outperform rating on LogMeIn Inc (NASDAQ: LOGM), while raising the price target from $53 to $56.

Although the stock is likely to remain rangebound in the near term, Moskowitz continues to believe that there could be more opportunities to monetize for the company in 2016.

LogMeIn reiterated that it expects to double its revenues over the coming 3-4 years, and continues to see significant opportunity to acquire new customers and enhance spend among existing customers.

The company "recently instituted a significant price increase for LOGM Pro that includes LastPass and 1TB of storage, and we expect this will drive incremental growth in 2016," according to the Cowen report.

The company is expected to continue to fine-tune pricing and package across many of its products over time.

"We are very bullish on the recently acquired LastPass. Within the IT mgmt segment, LastPass got off to a good start, and LOGM expects to accelerate its growth this year. In our view, LastPass's UI and password mgmt technology is extremely strong," Moskowitz mentioned.

Prior to the acquisition, LastPass was able to achieve better conversion rates than LogMeIn, despite its small sales force. LogMeIn expects to build LastPass a dedicated sales force, having already assigned "incremental quota to its inside sales reps."

LogMeIn also intends to increase LastPass' marketing spend. "the recent acquisition of LastPass should drive incremental cross-selling opportunities," Moskowitz added.