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Symbility is a compelling SaaS junior, says Cormark’s Tse

Cormark analyst Richard Tse says Symbility, which recently changed its name from Automated Benefits, is an up and coming SaaS vendor.This morning, Symbility Solutions (TSXV:SY) announced it had reached an agreement with Assure Group Benefits. The Vancouver-based company will begin using Symbility’s web-based software platform, Ajudicare, for health and dental claims.

Ajudicare President Richard Adair said: “We are pleased to add another reputable, experienced and passionate benefits partner like Assure Group Benefits to our growing list of clients. This new partnership continues to prove that Adjudicare has a compelling value proposition,” he sai, adding: “I am proud that they see value not only in the Adjudicare technology, but in the network of strategic vendors we have built across Canada and what it can do to enhance their business in this ever-competitive market. I look forward to a successful and long-lasting partnership for both of our organizations.”

Cormark analyst Richard Tse says Symbility, which recently changed its name from Automated Benefits, is an up and coming SaaS vendor. What’s more, says Tse, is that while the company is already showing impressive growth in its financials, its valuation still lags behind its peers. The Cormark analyst says equivalent SaaS/transaction processing software comparables trade at approximately five to six times EV/sales, while Symbility trades at just over three times. In a research update to clients Monday, Tse reiterate his STRONG BUY rating and $.70 cent target on Symbility.

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This story is brought to you by Serenic (TSXV:SER). Serenic’s cash position as of May 31st, 2012, $4.45-million, was greater than its market cap as of September 6th, which was $3.86-million. The company has zero long-term debt. Click here for more info.

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After a slide that began seven years ago, 2012 has been a good year for shareholders of Symbility. In January, the company announced it would acquire the claims division of Marshall & Swift/Boeckh, for $18.1-million. MSB, which was owned by Kansas City based market research firm Decision Insight, added three execs to its board and became the largest single shareholder in the company. The acquisition added annualized revenue of approximately $8-milion to Symbility’s topline. The Toronto-based company is divided into two operating divisions, Automated Benefits Inc., which develops software to improve health and dental claims, and Symbility Solutions, which focuses on property claims. Symbility speeds up property claims and makes the process more transparent by giving every claim participant real-time access and collaborative tools.

Tse says one of the compelling things about Symbility is that its platform encourages connections beyond the insurance carrier and into suppliers and service companies. He notes that the number of pay points per claim with client Farmers is likely less than two. Since June, however, Symbility has increased the number of users accessing its platform from 3500 to more than 10,000, suggesting the number of pay points could be as high as six. Each pay points adds to the dollar value per claim for Symbility, points out the Tse. A claim is worth $10-15 to the company now, but could rise to $50-60, he says.

At press time, shares of Symbility were up 2.4% to $.43 cents.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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