Buy Cortex ahead of Q4 results, Haywood says

Ahead of the company’s fourth quarter results, due next Wednesday, Haywood Securities analyst Pardeep Sangha thinks investors should be looking at Cortex Business Solutions (Cortex Stock Quote, Chart TSXV:CBX).

On October 24, CBX will report its Q4 and fiscal 2018 results. In the fourth quarter, Sangha thinks the company will post Adjusted EBITDA of $500,000 on revenue of $3.3-million, a topline that would be up per cent over the $2.9-million the company reported in last year’s fourth quarter.

Sangha says Cortex looks to be on track for a $20-million run rate by the fourth quarter of next year, as predicted by the company’s management.

“Management has been very bullish about the sales pipeline and the recent acquisition is a meaningful step in reaching their $20M goal,” the analyst says. “We continue to expect several potential growth drivers in addition to organic sales including expansion into the US market and diversification into additional verticals.

Cortex Stock Has Upside

In a research update to clients Thursday, Sangha maintained his “Buy” rating and one-year price target of $7.00 on Cortex Business Solutions, implying a return of 73 per cent at the time of publication.

Sangha thinks CBX will generate Adjusted EBITDA of $2.4-million on revenue of $12.6-million in fiscal 2018. He expects those numbers will improve to EBITDA of $4.5-million on a topline of $18.3-million the following year.