Ottawa’s ProntoForms (TSXV:PFM) is an emerging leader in enterprise mobile software solutions and has big potential for upside, says Paradigm Capital analyst Gabriel Leung.
In a research report to clients this morning, Leung initiated coverage of ProntoForms, formerly TrueContext Mobile Solutions, with a “Buy” rating and $0.70 one-year target, implying a 100% return from Friday’s closing price of $0.35.
Leung explains that ProntoForms enables field workers or any employee largely dependent on a mobile device to escape the tangle of paperwork associated with accounting and finance related forms. He cites a recent study from Frost and Sullivan that says addressable market opportunity in the space exceeds 22-million mobile workers. He values the space currently at $5-billion, based on a recurring revenue rate of $20 per month per mobile worker.
The Paradigm analyst expects this market is currently in single-digit penetration and will see greatly accelerated adoption in the years to come. ProntoForms, he says, has emerged as a early market leader, with a subscriber base of more than 30,000 users across 2500 organizations, including nine of the Fortune 100.
One large customer that ProntoForms has already demonstrated value to is Ingersoll Rand. Leung notes that the company was able to eliminate duplicate paperwork from many of its field engineers. Ingersoll found that the annual cost of using ProntoForms was £11,482, while the yearly savings was £48,818. Leung speculates that this kind of cost savings could make ProntoForms an attractive acquisition target for a company with a large mobile workforce SAP or Oracle.