Apivio Systems third quarter results get thumbs up at Haywood

Apivio’s (Apivio Stock Quote, Chart, News: TSX:APV) third quarter results were “exceptionally strong” says Haywood analyst Pardeep Sangha.

This morning, Apivio reported its third quarter, 2015 results. The company earned $516,529 on sales of $16.86-million, up 52% from the $11.07-million topline the company posted in the same period a year prior.

“We are pleased with the unexpectedly high performance of the last quarter,” said CEO Rob Bakshi. “Our South Korean subsidiary continues to grow and provide the engine for business development activities in the North American market. Despite some short delays, the NEC relationship is expected to enhance and accelerate. Business development efforts in North America for our L2 Wi-Fi phone are under way as we continue to perfect the technology.”

Sangha says this quarter was strong enough to warrant slight bumps in his revenue estimates for Apivio. The analyst now expects the company’s revenue will grow 21 per cent to $56.4-million this year, will add 13 per cent in 2016, to $63.8-million, and then a further 17 per cent to $74.8-million in fiscal 2017.

In a research update to clients this morning, Sangha maintained his “Buy” rating and one-year target price of $1.00 on Apivio, implying a return of 185.7 per cent at the time of publication.

The analyst believes Apivio is cheap compared to its peers.

“Apivio is currently trading at 0.3x EV/Revenue multiple of out CY16 forecast, well below the average of its industry and Canadian software peers,” says Sangha. “Our target price represents EV/Revenue multiple of 0.7x and an EV/EBITDA multiple of 11x applied to our FY17 estimates.”

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