Apple and Samsung beginning to contribute to Absolute Software’s rise, says Stifel

Absolute Software’s (Absolute Software Stock Quote, Chart, News: TSX:ABT) new sales team is executing well, and is driving higher value contracts with an increasingly larger percentage of new customers, says Stifel Nicolaus analyst Blair Abernethy.

After market close yesterday, Absolute reported is Q4, 2013 results. The company earned $1.73-million on sales of $26.2-million, a topline that was 10% higher than the same period last year.

Abernethy says the company’s revenue number came in beat both his and the street’s expectations. He though the company would post $22.6-million, while the street consensus was at $23.9-million.

The Stifel Nicolaus analyst notes that Absolute is beginning to gain real traction in mobile. The company’s iPad app-based Computrace Mobile Theft Management is now being sold through Apple, and has already racked up key wins. Absolute is also working closely with Samsung and should see contribution from that global player in the second half of fiscal 2014, he says.

In a research update to clients this morning, Abernethy updated his estimates for the next two fiscal years. He now believes Absolute will generate operating cash flow of $19.3-million on revenue of $100-million in fiscal 2014, moving his topline up slightly. For fiscal 2015, he thinks the company will generate operating cash flow of $21.8-million on sales contracts totaling $111.6-million.

As a result of these changes, Abernethy maintained his BUY rating on Absolute Software, but raised his one-year target on the stock to $10.25, up from his previous $9.00 target.