AcuityAds gets “Top Pick” status at Echelon Wealth Partners

In a research report to clients Wednesday, Goff maintained his “Speculative Buy” rating, but raised his one-year price target on AcuityAds from $1.40 to $1.80, implying a return of 59 per cent at the time of publication.

Goff explained some of the reasoning behind his increased bullishness.

“We retain our longstanding positive view towards AT’s programmatic platform,” the analyst explained. “We look for building momentum with y/y organic growth beyond Q318 no longer hurt by the EMEA self-service business terminated by AT or by the 140 Proof client taking in house (announced Sept. 11/17). Visible organic growth together with the accretion associated with the ADman acquisition (closed June 15/18) and the Sept. 10/18 strategic transaction to acquire sales professionals and specific assets from a US artificial intelligence company. The most recent acquisition was negotiated for no upfront investment brought roughly 20 established sales professionals where incremental sales could approach $20M annually. The most recent deal included a six month earnout based on a set percentage of net revenues. It is expected that the earnout should be roughly in line with the positive net working capital of the acquisition.”

Goff’s upwardly revised figures for fiscal 2018 have AT generating Adjusted EBITDA of $600,000 on revenue of $58.7-million.

“Our Top Pick Portfolio constituents typically reflect positive catalyst potential,” the analyst adds. “We prefer to avoid turnarounds. However, we are adding AT to our Top Pick Portfolio given its near term financial momentum and the potential for positive forecast and in turn valuation revisions.”