A new report from Ericsson adds strength to theory that Baylin Technologies (TSX:BYL) is poised to benefit from the ratcheting up of data consumption, says Paradigm Capital analyst Daniel Kim.
Earlier this month, Ericsson releaed its Mobility Report: June 2017. The report predicts a future in which data usage will expand greatly throughout the world.
“For the next 6 years, more than 1 million new mobile broadband subscribers will be added per day. This means there will be an additional 2.6 billion subscribers by the end of 2022,” reads the report’s abstract. “The June 2017 edition of the Ericsson Mobility Report continues to forecast the growth of mobile technology, including IoT connections and LTE.”
Kim says this extensive study backs his ideas about the untapped value in Baylin Technologies.
“(The Ericsson report) supports our key thesis on Baylin,” the analyst says. “Namely, mobile broadband subscriptions will grow at robust rates, as will data consumption per user. Combined, this will stretch the current infrastructure; therefore, densification of cellular networks is an absolute necessity for carriers to satisfy increasing demand.”
In a resarch update to clients today, Kim maintained his “Buy” rating and one-year price target of $5.00 on Baylin Technologies, implying a return of 138 per cent at the time of publication.
Kim thinks Baylin will post EBITDA of $3.5-million on revenue of $93.9-million in fiscal 2017. He expects those numbers will improve to EBITDA of $10.6-million on a topline of $104.3-million the following year.