BMO Capital Markets says Navan stock could rebound sharply as investor concerns about AI disruption appear to be overblown. The bank launched its corporate travel and expenses platform with an Outperform rating. Analyst Daniel Jester’s $13 price target suggests 48% upside potential. Navan’s stock price has plummeted 48% this year, and Jester attributes the decline to concerns about continued growth trends and the potential for disruption from AI tools. Since the company’s IPO in October, priced at $25, the stock has fallen 65%. NAVN 1Y Mountain NAVN 1Y Chart “Navan’s IPO late last year was met with a near-perfect storm of macro-driven risk and uncertainty as investors assessed the impact of emerging AI technologies on their application software businesses,” Jester wrote. “We believe the short-term impact on the (travel and expense) market is less than feared and less than what we would expect to be priced into the stock at current levels. We believe Navan can gain share in a market where global business travel penetration is still low,” the analyst said, adding that Navan’s share of global travel bookings planned on its platform is in the low single digits. This number has increased by 36% over the past 12 months. Jester expects it to grow at least 23% next year as Navan cross-sells a wide range of non-travel platforms and traditional providers expand their share. Jester acknowledged investors’ concerns about AI, but said those concerns may be unfounded. “The evidence to date regarding this threat is still inconclusive, there are few agent solutions on the market, and there is no evidence in our channel checks that enterprise customers are moving away from tools like Navan to general-purpose AI workflows or new ‘native’ AI tools,” he said. “We believe Navan’s strategy has similarities to Intuit’s, with a business model that offers a hybrid of automation and human travel agency. We believe this strategy can be replicated by Navan, as profits continue to grow at a healthy pace, even as they bring in more talent to support growth.” Jester added that while Navan’s valuation is not the only factor in his rating, it is certainly a tailwind from the stock’s decline since its IPO. “Comparing its financials to its peers in software, financial software, and even consumer travel-focused stocks, Navan stock appears to be attractively valued given its current business trajectory of high-20s revenue growth. We see execution and expected upside to estimates potentially reducing some of the price multiple discount,” he added.
