After a quarter that met his expectations, Industrial Alliance Securities analyst Blair Abernethy is raising his price target on Symbility Solutions (TSXV:SY), owning to a rolling forward of his valuation.
This morning, Symbility Solutions reported its Q3, 2016 results. The company lost $530,000 on revenue of $8.7-million, an 11 per cent topline bump over the same period a year prior.
“We are very pleased with our third quarter results, reporting another record revenue quarter, resulting in an increase to our 2016 guidance from $33-million to meet or exceed $34-million,” said CEO James Swayze. “Our year-to-date revenue has increased 37 per cent as compared to the same period last year as a consequence of expanding into new geographies, acquiring new customers in our current territories, upselling new products into our existing customer base and gaining market share from competitors in mature markets. We are also happy to report that although we continue to invest meaningfully in new products and new markets, we were adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) positive for the second consecutive quarter coming in at $264,000 which gives us confidence that we will have an overall positive adjusted EBITDA for the year in 2016.”
Abernethy says Symbility’s third quarter was in-line with his expectations, and he expects the company can build off of the results.
“We remain positive on Symbility as the company’s innovative solutions continue to gain traction in the marketplace,” he says. “We remind investors that CoreLogic (~28% owner of Symbility) has a takeover Standstill Agreement which expires in April 2017, which we believe helps to create a “floor” for Symbility’s stock. Symbility continues to have a strong pipeline of opportunities and pilots in North America, Asia and Europe and notes that its conversion rate is still ~67%. Conversion of these pilots should help support Symbility’s growth profile in 2017 and beyond.”
In a research update to clients today, Abernethy maintained his “Speculative Buy” rating on Symbility Solutions, but raised his one-year target price on the stock from $0.55 to $0.65, implying a return of 25 per cent at the time of publication, including dividend. The analyst says the price target range is the result of introducing his 2018 estimates and rolling forward his valuation.
Abernethy thinks Symbility will post Adjusted EBITDA of $500,000 on revenue of $33.9-million in fiscal 2016. He expects these numbers will improve to EBITDA of $1.2-million on a topline of $38.5-million the following year.