Altus Group has 53% upside, National Bank Financial says

Following the company’s second quarter results, National Bank Financial analyst Richard Tse remains upbeat about Altus Group (TSX:AIF).

On Tuesday, Altus Group reported its Q2, 2018 results. The company earned $330,000 on revenue of $134.2-million, a topline that was up five per cent over the same period last year.

“We are making great progress towards our growth objectives while maintaining a focus on profitability,” CEO Robert Courteau said. “Our recent investments in the cloud, the modernization of our expert services, and recent acquisitions position us extremely well for robust growth and margin expansion as we continue to expand our geographic footprint with the world’s largest players in the CRE [commercial real estate] market.”

Tse says the company’s results slightly bested his expectations. And though the analyst believes that Altus is still in an “investment/transition” phase, he says there is evidence that recent investments are showing up in the company’s results.

“Bottom line, there was nothing in the Q2 results or call to throw us off that investment thesis and our view that the 2019 outlook is not priced into the stock,” Tse says.

In a research update to clients today, Tse maintained his “Outperform” rating and one-year price target of $43.00 on Altus Group, implying a return of 53 per cent at the time of publication.

Tse thinks AIF will generate EBITDA of $87.9-million on revenue of $526.5-million in fiscal 2018. He expects those numbers will improve to EBITDA of $107.2-million on topline of $584.4-million the following year.