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AcuityAds has triple-digit upside, says Paradigm Capital

AcuityAds

AcuityAds Following AcuityAds’ (AcuityAds Stock Quote, Chart, News: TSXV:AT) first quarter results, Paradigm Capital analyst Spencer Churchill is still a big believer in the company’s promise.

Yesterday, AcuityAds reported its Q1, 2015 results. The company lost $1.43-million on revenue of $3.04-million, a topline that was up 10% over the same period last year.

“We are delighted to have continued our revenue growth in Q1 2015, during a quarter that is typically the slowest in the advertising industry,” said CEO Tal Hayek. “Furthermore, as a result of investments made in earlier quarters, we saw our U.S. revenues grow by 54 per cent and our SaaS-based self-service revenues improve by 157 per cent year over year.

Churchill says AcuityAds has fast established itself as the dominant player in the Canadian programmatic real-time bidding online advertising market and has big upside despite the quarter-by-quarter ups and downs that might hinder a company of its size.

“We are encouraged by continued strong growth in self-service and U.S. revenue, while margins were solid and opex has started to come down,” said the analyst. “The offset was a decline in total revenue growth to ~10% y/y from ~50% in Q3–Q4/14. However, we note that there remains some lumpiness in the business and the growth experienced in H2/14 came after 14% y/y revenue growth reported for Q2/14 (which was similar during the last financing). Hence, we do not believe one quarter makes a trend and remain confident that revenue growth should accelerate through 2015.”

In a research update to clients today, Churchill maintained his “Buy” rating and one year target of $1.80 on AcuityAds, implying a return of 150% at the time of publication.

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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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