Symbility Solutions (TSXV:SY) is a junior tech that investors should keep an eye on, says Industrial Alliance Securities analyst Blair Abernethy.
In a research report to clients today, Abernethy initiated coverage of Symbility Solutions with a “Speculative Buy” rating and a one-year price target of $0.55, implying a return of 44.7 per cent at the time of publication, including dividend.
Abernethy says Symbility is SaaS-based insurance vendor that has a significant growth opportunity.
“We believe that Symbility has a significant market opportunity to supplant legacy desktop claims processing software in the P&C insurance industry, in particular products from vendors such as Xactware (a subsidiary of Verisk [VRSK-Q, Not Rated]), as large insurance customers look to streamline and improve their claims processing operations,” says the analyst. “The US P&C industry typically processes 8-9M property damage claims annually, which we believe could represent a market opportunity in excess of US$250M annually for Symbility’s core claims processing solution.”
Abernethy says he expects Symbility will grow its revenue by 25.3 per cent in 2016 to $33.2-million, and by more than 11 per cent the following year, to $36.9-million. He says that even though the company is investing heavily in product and market development he thinks it will come close to break even in EBITDA, near term.