Pivot Technology still has several growth catalysts, says Cantor Fitzgerald Canada

Pivot Technology Solutions (Pivot Technology Solutions Stock Quote, Chart, News: TSXV:PTG) just reported a fourth quarter that was better than he expected, but Cantor Fitzgerald Canada analyst Ralph Garcea thinks there is still plenty of upside in the stock.

Yesterday, Pivot reported its fourth quarter and fiscal 2015 results. In the fourth quarter, the company earned $13.9-million on revenue of $420.2-million, a topline that was up 11.3 per cent over the same period last year.

“In the second half of 2015, we made additional investments in our sales, integration, and core professional services offerings and capabilities, which contributed to the growth in operational expense for the quarter,” said CEO Kevin Shank. “This demonstrates Pivot’s commitment to drive innovation and bring new solutions to the market for its customers. It also shows our manufacturing partners that we are committed to the relationship with them, and that we are willing to invest in driving additional earning opportunities for both parties.”

Management also provided first quarter 2016 guidance in which it cautioned that the upcoming quarter is historically its weakest, but said it would exceed 2015’s revenue and gross profit marks. Garcea says he expects this will do little to tarnish what he expects will be a very strong year for the company.

“PTG provided cautious Q1/16 guidance for a seasonally weak quarter, but we expect the rest of the year to have plenty of growth catalysts to deliver another strong year under the new leadership of Kevin Shank,” said the analyst.

In a research update to clients today, Garcea maintained his “Buy” rating and one-year price target of $1.50 on Pivot Technology Solutions, implying a return of 256 per cent at the time of publication.