With a high margin $65-million contract expected to close in the near term, Urthecast (TSX:UR) is currently a “major buying opportunity”, says Clarus Securities analyst Eyal Ofir.
In a research update to clients this morning, Ofir maintained his “Speculative Buy” rating and one year target of $5.50 on Urthecast, implying a return of 370% at the time of publication.
Last Friday, Ofir attended an analyst update at the International Astronautical Congress and came away with a bullish feeling on Urthecast, which is currently his Top Pick. He says the update suggest that there is a “significant” pipeline of opportunities in the earth observation and media markets.
He notes that the company says it has already begun to execute on the aforementioned large contract and will recognize revenue when the ink is dry on the signatures. He points out the management says the contract is front end loaded and is has margins of between 85-90%.
Ofir also noted that management revealed it had gained access to NASA’s TDRSS Data Network. This development “significantly complements their current ground segment network and communication infrastructure as it enhances both capacity and delivery channels for the content,” he says.