Justification For The Upgrade Analyst William Power outlined 11 reasons for liking LogMeIn: 1. Strong Free Cash Flow: The analyst sees LogMeIn as a FCF story, as he estimates FCF margin of 28 percent in 2017 and 29.3 percent in 2018. 2. Unique SaaS Positioning: The company remains the most attractive in the SaaS universe in terms of its free cash flow generation, resulting in EV/EBITDA multiple of 13.4 times and P/FCF multiple of 18.4 times. 3. Valuation: Given LogMeIn stock's underperformance versus the SaaS group and its pullback from the highs following the second quarter, the analyst sees an attractive entry point. 4. Integration Progressing Well: The analyst noted that the company is already ahead of synergy guidance, with the guidance for the third quarter and 2017 appearing conservative. 5. Story Shifting to Revenue Synergies: Exiting 2017, the firm expects the LogMeIn story to focus on revenue synergy and possible future acquisitions, which it believes would re-energize growth investors. 6. Collaboration Tailwinds: The analyst believes the company is well positioned to benefit from the 10+ percent growth in the industry, which is valued at $2.5 billion. 7. LastPass Early: The company noted that GoTo sales reps are selling LastPass, lending credence to its theory of cross-selling success. 8. Bold360: The analyst expects Bold360 along with the recent AI-based Nanorep acquisition to reinvigorate customer support revenue. 9. UC: The analyst believes Grasshopper, the legacy Citrix Systems, Inc. (NASDAQ: CTXS) unified communications product would provide cross selling opportunities and benefit from a greater R&D focus. 10. Price: The analyst expects price raises to accelerate revenue growth in 2018. 11. M&A: The analyst noted that the management has expressed interest in M&A in the past. Accordingly, the analyst sees the company to be significantly larger in three to five years. SourceSeems like some consolidation in the current range is still possible. $LOGM, LogMeIn, Inc. / D