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Industrial Alliance lowers target, rating on Nightingale Informatix

Nightingale Informatix
Nightingale Informatix
Nightingale Informatix CEO Sam Chebib says the company’s transition to a SaaS model is meeting with expected volatility, but will ultimately be “worth the short-term pain”.

Industrial Alliance Securities analyst Steve Li says Nightingale Informatixs’ (Nightingale Informatixs Stock Quote, Chart, News: TSXV:NGH) recent financial results cast an air of doubt over the company’s near term future.

Yesterday, before market open, Nightingale reported its Q1, 2014 results. The company lost $779,629 on revenue of $3.8-million, down significantly from the $5.6-million topline the company posted in last year’s Q1.

CEO Sam Chebib, in the press release accompanying the results said the company’s transition to a SaaS model was meeting with expected volatility, but would ultimately be “worth the short-term pain”.

Li says he still believes that the opportunities that lay ahead for Nightingale are “undeniably fruitful” but that he is “vexed” by the company’s short-term outlook. He says the reason for the decline is that customers are reluctant to implement Nightingale’s new platform while waiting for the company’s delayed next-generation EMR platform, Nexia.

In a research update to clients this morning, The Industrial Alliance analyst says to reflect weaker than expected short term performance he is lowering his revenue forecast down to $16.9-million from his previous estimate of $22.8-million. He is also lowering his 2014 EBITDA expectation to $1.8-million from $6-million. The cuts result in a new target and rating: Li lowered his price target to $.50 from $.70 and re-rated the stock as a SPECULATIVE BUY instead of a STRONG BUY.

Shares of Nightingale Informatix closed today down 2.27% to $0.215.

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About The Author /

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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