BSM Technologies is undervalued, says Industrial Alliance Securities

Ahead of its Q1, 2017 results, Industrial Alliance Securities analyst Blair Abernethy is feeling good about BSM Technologies (BSM Technologies Stock Quote, Chart, News: TSX:GPS).

On February 9, BSM is expected to report its first quarter results for fiscal 2017. Abernethy thinks the company will post EBITDA of $2.6-million on revenue of $17.6-million, essentially in-line with consensus expectations.

Abernethy says he will be keeping a close eye on the organic expansion with BSM’s installed base, noting that it is beginning to see traction in the government vertical. He also points out that the company’ strong balance sheet offers it the opportunity for tuck-in acquisitions. Overall, he thinks the stock has upside.

“We believe that BSM’s vertical market focus, deeper penetration of customer asset bases, and improved software offering should enable it to achieve high single-digit organic growth as it completes the roll-over of legacy network subscriptions,” says the analyst.

In a research update to clients today, Abernethy maintained his “Buy” rating and one-year price target of $2.15 on BSM Technologies, implying a return of 28.7 per cent at the time of publication.

The analyst thinks BSM will generate EBITDA of $11.1-million on revenue of $73.0-million in fiscal 2017. He expects these numbers will improve to EBITDA of $14.2-million on a topline of $80.5-million the following year.

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