Cantor Fitzgerald’s Liston raises target on Absolute Software to $9

Cantor Fitzgerald analyst Tom Liston says Absolute Software (Absolute Software Stock Quote, Chart, News: TSX: ABT) is a new Top Pick.

This morning, the Vancouver-based security software company announced a deal with Samsung to track, manage and secure Samsung GALAXY devices, including the GALAXY S4 and the Korean conglomerate’s tablets.

Liston says the Samsung deal is big in and of itself, and also a potential catalyst for other deals. He notes that more than 50-million GALAXY S3s have been shipped and the GALAXY S4, which will be available later this month, is expected to substantially exceed those numbers. In a research update to clients this morning, Liston maintained his BUY rating and raised his target on Absolute Software from $7.50 to $9.

Liston says he arrived at the new target by applying a discounted cash flow model which equates to 10.5x his estimate of Absolute’s fiscal 2015’s EV/FCF. He says the difference between the stock’s current price and his target has led him to rate the company a TOP PICK.

With sales of $179-billion last year, Samsung is the world’s largest electronics company. According to IDC reports, the company now has a 29% share of the global mobile market, the 7% share it has gained since 2011 now puts it significantly ahead of second place Apple.

Shares of Absolute Software closed today up 16.4% to $6.39.