Pioneering Technology Corp. is undervalued, says Echelon Wealth

A new product launch isn’t enough to move the needle on his estimates for Pioneering Technology Corp. (Pioneering Technology Corp. Stock Quote, Chart. News: TSXV:PTE), but Echelon Wealth Partners analyst Russell Stanley says it is a positive step.

On Monday, Pioneering Technology announced that it had completed the installation of a new branded product at an unnamed Ivey League university. The company said the product, which uses heat sensor technology to alert users to cooking fire dangers, will soon be available to retail buyers.

“After much success for this technology in Europe, we are very excited to begin the product’s introduction in North America with such a highly regarded Ivy League university,” said CEO Kevin Callahan. “This is an exciting cooking fire prevention solution that we are committed to and believe will help us broaden our reach and focus of helping to continue to reduce the No. 1 cause of cooking fires in North America.”

Stanley says this product, which targets the electric smooth top ranges, as opposed to its core SmartBurner product which targets coil-top stoves, is a nice complementary product that expands the company’s addressable market.

“While we are not materially changing our estimates, we view this as a positive step towards developing and monetizing products that are complementary to Pioneering’s lead product, SmartBurnerTM,” the analyst says. “We continue to view PTE as an undervalued, underfollowed play on new safety requirements that should drive strong demand growth for the Company’s cooking fire prevention products.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $1.60 on Pioneering Technology, implying a return of 54 per cent at the time of publication.

Stanley thinks Pioneering technology will generate Adjusted EBITDA of $4.4-million on revenue of $14.9-million in fiscal 2018. He expects those numbers will improve to EBITDA of $8.0-million on a topline of $22.1-million the following year.