Knight Therapeutics has 29% upside, Beacon Securities says

Following the company’s second quarter results, Beacon Securities analyst David Kideckel has maintained his “Buy” rating on Knight Therapeutics (TSX:GUD).

This morning, GUD reported its Q2, 2018 results. The company earned $4.01-million on revenue of $2.23-million, a topline that was down ten per cent over the same period last year.

“I am pleased with our progress at strengthening Knight’s pipeline of innovative pharmaceuticals directed at touching the lives of patients,” CEO Jonathan Ross Goodman said. “Our recent strategic investment and licence agreement with TherapeuticsMD for two late-stage, differentiated women’s health products successfully leverages our strong balance sheet to help Knight secure innovative pharmaceutical rights.”

Kideckel says the results were in-line with his expectations and thinks that despite the minor fluctuations quarter over quarter the company will hit his revenue estimate this fiscal year.

“Knight continues to maintain its GUD balance sheet position while leveraging it to help the company secure innovative and pharmaceutical rights,” the analyst says. “We believe that the company is in a GUD position to meet our FY2018 estimates so we thus maintain our Buy Recommendation of $10.70 target price per share.

Kideckel’s price target implied a return of 29 per cent at the time of publication.

The analyst believes GUD will post Adjusted EBITDA of negative $7.16-million on revenue of $9.01-million in fiscal 2018. In fiscal 2019, he expects the company will post Adjusted EBITDA of negative $7.47-million on a topline of $10.43-million.