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Global Maxfin initiates coverage of NTG Clarity Networks with a $1.00 target

NTG Clarity Networks
NTG Clarity Networks
Analyst Ralph Garcea says he expects NTG Clarity Networks will look to parlay success in Egypt into a stronger presence in the Middle East and North African market as a whole.

The increasing adoption of convergent billing systems by communication service providers and medium and large enterprises represents a major opportunity for NTG Clarity Networks (NTG Clarity Networks Stock Quote, Chart, News: TSXV:NCI), says Global Maxfin Capital analyst Ralph Garcea.

Yesterday, Garcea initiated coverage of NTG Clarity Networks with a BUY rating and a $1.00 target price.

Garcea says NTG provides investors with an opportunity to participate in the rapidly expanding Operations Support System/Business Support System (“OSS/BSS”) space. He says that telecom players will need to invest significantly in their network infrastructure to increase their average-revenue-per-user numbers and lower their churn rates. The company’s core product, NTS is an on-premise OSS/BSS solution that will help them do that.

The global market for convergent billing, notes Garcea, is expected to grow at a compound annual growth rate of 24% between 2011 and 2016, according to a recent report from Infonetics, who see the market reaching a total value of (US) $3.4-billion by 2016.

Garcea says NTG has a foothold in Saudi Arabia and Egypt, where it derives the bulk of its current revenue. He says that while this is a good place to be, particularly with the strong growth of the Saudi market, he expects the company will look to parlay this into a stronger presence in the Middle East and North African market as a whole.

Noting that NTG has been profitable in 27 of the last 33 quarters, Garcea says he expects the company will pass the $10-million revenue mark this year. Going forward, he says he expects NTG will generate gross margins in the 44-48% range and EBITDA margins in the 30-33% range.

At press time, shares of NTG Clarity Networks were up 6.3% to $.425.

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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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