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VIQ Solutions has 56% upside, says Echelon Wealth Partners

VIQ Solutions

VIQ SolutionsA quarter that bested his expectations has Echelon Wealth Partners analyst Ralph Garcea feeling good about VIQ Solutions (VIQ Solutions Stock Quote, Chart, News: TSXV:VQS).

On Thursday, VIQ Solutions reported its second quarter, 2017 results. The company posted adjusted net income of $160,000 on revenue of $3.2-million, with EBITDA coming in at $400,000.

“We are pleased to report a profitable quarter along with strong growth in top-line revenue,” said CEO Sebastien Pare. “Profit and revenue performance are a direct result of our market diversification strategy, advanced technology rollout and the execution of our platform road map. The company anticipates continued strong growth in recurring revenue for 2017 and beyond.”

Garcea notes that VIQ topped his estimate of EBITDA of $300,000 and revenue of $3.0-million. The analyst says the company is set to become a benficary of a trend towards digitiazation and cloud storage. He says the fact that the company is technology agnostic opens it up to an array of potential partners.

“With a pipeline that has significantly expanded in recent quarters, VIQ is in the process of converting strategic pilot programs into full scale projects in H217, particularly at the US federal level, the Canadian medical market, and in Europe,” the analyst says. “These pilots represent enterprise level wins with prestigious cybersecurity driven customers and should cement VIQ’s reputation as the global leader for secure digital AV capture and management solutions. Longer term, we expect EBITDA margins to push the 30% level as recurring revenue continues to grow.”

In a research update to clients today, Garcea maintained his “Speculative Buy” rating and one-year price target of $0.50 on VIQ Solutions, implying a return of 56 per cent at the time of publication.

Garcea thinks VIQ will generate EBITDA of $1.53-million on revenue of $13.17-million in fiscal 2017.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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