BeWhere Holdings (TSXV:BEW) is a junior tech investors should keep an eye on, Mackie Research Capital analyst Nikhil Thadani says.
In a research update to clients today, Thadani initiated coverage of BeWhere with a “Speculative Buy” rating. The analyst does not specify a price target yet, but rather granted a range of between $0.90-1.30 a share, though he believes the stock could go higher than that.
Founded in 2014, Etobicoke-based BeWhere is an IoT solutions provider whose solutions include cloud-based software that tracks information on moving and fixed assets, hardware sensors, beacons based on Bluetooth and middleware.
Thadani explained the reasoning behind his floating target on the stock.
“We are not yet introducing financial estimates/one year target as we expect meaningful revenue build visibility in H1/18,” he explains. “BEW appears on the cusp of meaningful revenue build after laying a robust product foundation over a couple years. We expect to introduce financial estimates and a one year price target as we gain additional comfort on revenue trajectory in H1/18.
The analyst says BeWhere stacks up well against it peers.
“BEW could have ~80-150% stock price upside investors gain confidence in medium term revenue exceeding $20 mln. Companies in a similar space trade at ~2-3x forward sales, with varying levels of higher multiple recurring revenue,” Thadani says. “As investors gain comfort in BEW’s medium term revenue approaching ~$20 mln, valuation at the high end of similar companies suggests a stock price ~$0.90-1.30/sh, with recurring revenue based upside. ”