A long-rumoured deal with NEC has become a reality for Apivio Systems (Apivio Systems Stock Quote, Chart, News: TSX:APV), and it has Haywood analyst Pardeep Sangha feeling more bullish than ever about the company.
This morning, Apivio announced it had signed a letter of intent to develop a next-gen, Android-based desktop smartphone for NEC Corp that will see global distribution.
“We are pleased to expand our relationship with NEC from the North America business unit to NEC’s head office in Japan, and this LOI is an endorsement of our shared vision that every enterprise desk phone will one day be a smart desk phone,” said CEO Rob Bakshi. “We are excited about the opportunity and look forward to working with them.”
Sangha says the deal is a clear positive for Apivio.
“We believe this announcement is a strong endorsement of Apivio’s UT880 smart desk phone,” says Sangha. “We believe this LOI clearly puts Apivio on the path to becoming a $100-million revenue company. We estimate that a global distribution agreement could result in over 200,000 annual unit sales, representing a revenue opportunity greater than $30-million annually.
In a research update to clients today, Sangha maintained his “Buy” rating on APV, but raised his one-year price target from $1.10 to $1.20, implying a return of 242.9 per cent at the time of publication.
Disclosure: Apivio is an annual sponsor of Cantech Letter.