Following the company’s annual general meeting, Paradigm Capital analyst Daniel Kim is feeling bullish about Firan Technology Group (TSX:FTG).
In a research update to clients today, Kim maintained his “Buy” rating and one-year price target of $5.75 on Firan, implying a return of 38 per cent at the time of publication, including dividend.
Kim says despite the fact that he has had numerous upward revisions to his forecasts, he continues to see a company in Firan whose margins are “on the tipping point” of a major inflection that should drive another material uptick in revenue and margins.
“Recent acquisitions (with more to come) and new programs promise to deliver terrific growth, both top line and importantly, bottom line leverage, with 30% EBITDA contribution from acquired assets,” the analyst says. “Emerging still are new programs, new products, growing cross selling opportunities and a potentially massive increase in utilization in the company’s China JV.”
Kim thinks Firan will generate Adjusted EBITDA of $13.5-million on revenue of $105.7-million in fiscal 2017. He expects those numbers will improve to EBITDA of $19.4-million on a topline of $117.8-million the following year.