D-BOX is very undervalued, says Industrial Alliance analyst Steve Li

Industrial Alliance analyst Steve Li says he is confident that exhibitors will continue to “aggressively” invest in motion technology, and that D-BOX (D-BOX Technologies Stock Quote, Chart, News: TSX:DBO) will be a prime beneficiary of this trend.

Tomorrow, before market open, D-BOX will report its Q1, fiscal 2014 results. The Industrial Alliance analyst says he expects that the company will post revenue of $3.7M, up 2.8% year-over-year from last year’s Q1.

Li says the sales cycle for the company’s MFX units is still lumpy, and he expects that revenues from commercial theatres will decrease slightly to $1.7-million, down from $2.0-million last year. He thinks the company’s OEM segment will offset this, with sales that will be up 25% to $2-million. He expects D-BOX’s total seat installation tally will surpass 5,200, across a total of 208 auditoriums.

In a research update to clients today, Li reiterated his 12-month target price of $1.00 and his SPECULATIVE BUY rating.

Li says D-BOX has had increasing success getting blockbusters to encode its MFX, which enables motion seats to be synced to action on the screen. Within Q1 alone the company booked Iron Man 3, Fast and Furious 6, and Man of Steel, and the upcoming quarter will feature Pacific Rim, 2 Guns, Rush and Gravity.

Shares of D-BOX closed today even at $0.20.

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