Firan Technology Group is a near double from here: Beacon

Following the company’s fourth quarter results, Beacon Securities analyst Gabriel Leung has raised his price target on Firan Technology Group (Firan Technology Group Stock Quote, Chart TSX:FTG).

On Wednesday, Firan reported its Q4 and fiscal 2018 results. In the fourth quarter, the company posted net earnings of $2.0-million on revenue of $28.0-million, a topline that was up 22.5 per cent over the same period last year.

“FTG made great progress in 2018 in demonstrating the strength of the company and our earning potential,” CEO Brad Bourne said. “Our sales growth was exceptional and as each quarter passed the operating results improved.”

Leung says this was a solid performance that he believes reflects new bookings from new and existing customers, as well as the success from recent efforts to improve manufacturing efficiency.

Overall, we believe fiscal Q4 was a strong quarter and the company enters the new fiscal year with a strong backlog and pipeline of opportunities within its core aerospace and defense markets,” the analyst says. “With the majority of margin accretion from the integration of FTG’s acquisitions now realized, we believe future revenue/margin growth will be predicated on revenue growth and mix, along with ongoing productivity gains. We also believe the company could be more active with M&A this year to help increase scale (the company’s Toronto facility is operating close to full capacity) and also to add new technologies within its core markets.”

In a research update to clients today, Leung maintained his “Buy” rating, but raised his one-year price target on FTG from $4.25 to $5.00, implying a return of 96 per cent at the time of publication.

Leung thinks Firan will post EBITDA of $13.6-million on revenue of $116.3-million in fiscal 2019.