Absolute Software’s recent pullback makes it attractive, says Cormark

Shareholders of Absolute Software (TSX:ABT) are patiently waiting for the person who will replace longtime CEO John Livingston, but Cormark analyst Richard Tse says the stock is “compelling despite some uncertainty.”

Yesterday, Absolute reported its Q3, 2014 results. The company earned (US) $1.4-million on sales contracts that totaled $20.5-million, a topline that was up 8% over the same period last year.

Interim CEO Erroll Olsen characterized the quarter.

“Strong performance in the North American education and corporate verticals drove our top-line growth in the quarter,” he said. “Our device management and data security solutions delivered strong growth, led by sales of Absolute Manage and record performance of our MDM product. Looking forward, against the backdrop of a continued shift toward mobile computing, increasing requirements for data security and growing demand for simplified IT management, our product portfolio is uniquely positioned to address today’s top priorities for IT and security managers.”

Tse says Absolute’s Q3 was uneventful. But he also says there are early signs that there is growth beyond Absolute’s legacy business in the theft management space that could potentially be ignited by the presence of a “marquee addition” at the helm of the Vancouver-based company. Though theft management continues to grow, the Cormark analyst says new products under the banner of Device Management and Data Security are starting to show real strength, particularly in mobile.

In a research update to clients this morning, Tse maintained his “Buy” rating and $8.50 one-year target price on Absolute Software.

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