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Following Q3 results, Cormark downgrades Mediagrif

Mediagrif

On Tuesday, Mediagrif (TSX:MDF) reported its Q3, 2013 results. The company earned $3.47-million on revenue of $15.1-million.

Cormark analyst Richard Tse says Mediagrif’s topline fell below his expectations, which was for $15.4-million, and the street’s, which was $15.6-million. The company’s EBITDA of $6.1-million was also below his $6.6-million estimate and the street’s $6.3-million.

Tse says these results reveal a stock that in pricing in high expectations, but has significant challenges in front of it. In a research update to clients Thursday, Tse downgrading Mediagrif from Market Perform to Reduce, but maintained his price target of $18.

Founded in 1996, Longueuil, Quebec-based Mediagrif offers a range of e-commerce services through B2B platforms such as The Broker Forum, Power Source Online, and Carrus Technologies. The company became increasingly profitable as it grew its revenue from $47.9-million in 2009 to $53.8-million in 2012.

Tse says strong cost controls have led to Mediagrif’s profitability, but the company is caught on an “attrition treadmill”. He says he is waiting on a clearly defined topline growth strategy.

Shares of Mediagrif closed today up .1% to $19.46.

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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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