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PyroGenesis is undervalued, says Mackie

PyroGenesis CEO Peter Pascali.

PyroGenesis (PyroGenesis Stock Quote, Chart, News: TSXV:PYR) has a range of opportunities across multiple industries, says Mackie Research Capital analyst Raveel Afzaal.

In a research update to clients this morning, Afzaal initiated coverage of PyroGenesis Canada with a “Speculative Buy” recommendation and a 12-month target price of $0.70 per share, implying a return of 126% at the time of publication.

Afzaal says Pyro plasma based solutions are “cutting edge” and have very promise in the oil and gas industry, where it is conducting pilot tests with a large company. The analyst thinks this could lead to a long-term recurring revenue opportunity. The company has also sold two waste destruction systems built for aircraft carriers to the U.S. Navy for a total value of about $15 million. He believes selling to this level of client reflects favourably on the company.

“We believe the fact that the U.S. Navy is PyroGenesis’ repeat customer serves as a significant technology validation milestone for the company,” says Afzaal.

Afzaal is forecasting revenue of $9-million for PyroGenesis in fiscal 2015, a topline he thinks will climb to $17-million the following year. He thinks the company will generate Adjusted EBITDA of $0.4 million in 2015 and $4.7 million in 2016.

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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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