Buy D-BOX ahead of Thursday earnings, says Industrial Alliance

Li says the bulk of D-BOX’s growth should originate from the commercial theatre segment, where he sees growth in excess of 60%. He expects the company will have had more than 4500 MFX seats installed and operational by quarter’s end.On Thursday, D-BOX Technologies (TSX:DBO) will report its Q3, 2013 results. The company is coming off its best quarter ever, revenue wise. Its Q2, 2013 topline of $3.71-million was an 83% increase over the same period a year prior.

Industrial Alliance analyst Steve Li thinks D-BOX will be challenged to best its Q2 topline, but will continue to show strong year-over-year growth. He thinks the company’s Q3, 2013 revenue will double the $1.8-million it reported in the same period in 2012. In a research update to clients this morning, Li reiterated his Speculative Buy rating and 12-month target price of $1.00 on D-BOX.

Longueuil, Quebec based D-BOX was founded in 1992, and the two-decades since have seen the company perfect its seat technology. D-BOX’s MFX systems use motion effects specifically programmed for a particular film, TV series or video game, which are then sent to a motion generating system integrated within either a platform or a seat. While, as late as 2009, the company struggled to build a consistent revenue stream, things improved when management decided to dedicate itself to the commercial theatre market. Although D-Box is still losing money, revenue is improving, and Li thinks the upcoming Q3 may be the company’s third straight of positive EBITDA.

Li says the bulk of D-BOX’s growth should originate from the commercial theatre segment, where he sees growth in excess of 60%. He expects the company will have had more than 4500 MFX seats installed and operational by quarter’s end.

Shares of D-BOX closed today up 4.2% to $.25.

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Shares of D-Box closed today