DIRTT Environmental is still undervalued, says Industrial Alliance

After attending the company’s annual analyst day, Industrial Alliance Securities analyst Neil Linsdell came away feeling good about DIRTT Environmental’s (DIRTT Environmental Stock Quote, Chart, News: TSX:DRT) growth prospects.

On June 7 in Chicago, Linsdell attended DIRTT Environmental’s annual analyst day, which takes place ahead of its annual Connext event, which showcases its products to design professionals.

Linsdell says enthusiasm remains high at the firm. He says he remains confident that DIRTT is well positioned and fully committed to achieving significant growth over the next few years, particularly n the Healthcare segment.

“The overall atmosphere at the Analyst Day was very positive as Management stressed how well the business has diversified and grown over the last few years, and how the ongoing trend of shortages of skilled craftsmen, is reinforcing DIRTT’s value proposition, which includes a heavier (70%) weighting towards material costs vs. conventional construction which is 70% weighted towards labour costs,” says the analyst. “The business is also expanding globally, and Management highlighted new healthcare wins in Kuwait and Singapore.”

In a research update to clients Friday, Linsdell maintained his “Strong Buy” rating and one-year price target of $9.00, implying a return of 40.2 per cent at the time of publication, including dividend.

Linsdell thinks DIRTT Environmental will post Adjusted EBITDA of $44.9-million on revenue of $318.1-million in fiscal 2017. He expects those numbers will improve to EBITDA of $61.4-million on a topline of $368-million the following year.