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Espial gets buy rating and $4.00 target from Clarus analyst Ofir

Espial Group

A major shift in the way cable is being delivered and consumed is creating a huge opportunity for Espial Group (TSX:ESP), says Clarus Securities analyst Eyal Ofir.

In a research report to clients this morning, Ofir initiated coverage of Espial with a “Buy” rating and one-year target of $4.00.

Ofir thinks Espial, which has spent years developing expertise in creating IPTV video services such as video-on-demand and TV web browsing, will soon find itself the beneficiary of a major change in the cable business. He says many operators are following the lead of Comcast and standardizing on the RDK framework (RDK stands for Reference Design Kit, a pre-integrated software bundle that provides a common framework for powering customer-premises equipment from TV service providers) and HTML5 so they can provide customers with next generation video services. He notes that the company is already in discussions with more than a a third of the top 70 global cable operators.

The financial implications of capturing a mere 10-20% of the cable market, says Ofir, are massive. In North America alone, he says, this represents represents mid-point one-time license revenue of more than $82-million, with recurring support revenue of more than $12-million annually.

You can also add the Smart TV market to the list of near-term opportunities for Espial, says the Clarus Securities analyst. The company has existing relationships with nine global television OEMs that position it neatly in a market that analysts predict will double to nearly a quarter-billion dollars by 2017, he notes.

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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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