Sandvine is finally hitting its stride, says Cormark

Cormark analyst Richard Tse says that, following a year in which it struggled though partner changes and product revisions, Sandvine (Sandvine Stock Quote, Chart, News: TSX:SVC) is finally hitting its stride.

Yesterday, the Waterloo-based provider of network policy control solutions reported its Q1, 2013 numbers. The company earned $1.7-million on revenue of $25-million.

Tse says that with content offerings growing, carriers and operators will look, increasingly, to technologies that Sandvine offers, such as Deep Packet Inspection and Service Creation. He says the “retuned” company has built a portfolio of offering beyond its traditional traffic management offerings and has an increasing global reach because it has worked hard to expand its partner base. In a research update to clients this morning, Tse maintained his BUY rating on Sandvine, but raised his target to $2.75. His previous target was $2.25.

Tse says the obvious question about Sandvine at this point is whether or not its recent growth is sustainable. The Cormark analyst says he believes it is because the company’s intellectual property has proven difficult to replicate. He says this is reflected in the company’s acquisition expanding partner channel, which includes the recent additions of IBM and Juniper.

Sandvine’s revenue dipped to $87.93-million last year, but Tse believes it will begin to climb again, to $111.9-million in fiscal 2013, and to $147.3-million the following year.

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