Technology-enabled real estate platform Voxtur Analytics (Voxtur Analytics Stock Quote, Chart, News, Analysts, Financials TSXV:VXTR) received a coverage initiation from Eight Capital analyst Christian Sgro on Thursday, with Sgro saying even with the stock’s gains over the past year, Voxtur is still trading at a discount to its peers.
Formerly iLOOKABOUT Corp, the company in February closed on the acquisitions of Delaware-based real estate tech company Voxtur Technologies and title, escrow and Florida-based settlement services company Brightline Title, with the merger resulting in a name change to Voxtur Analytics.
Voxtur then closed in March on an over-subscribed, non-brokered private placement for gross proceeds of $35 million.
“The success of the private placement is a sign of confidence from our investors and reflects their belief in and support for our growth strategy. This infusion of capital will allow us to accelerate our strategic plan,” said Chairman Gary Yeoman in a May 31 press release.
“More specifically, we will use this money to grow and scale our platforms across North America, creating efficiencies for our stakeholders and increased returns for our investors,” Yeoman said.
Voxtur provides automated workflows and targeted data analytics for tax solutions, property valuation and settlements, with its business serving the public and private property lending and property tax sectors in the United States and Canada.
Sgro says Voxtur is a unique Canadian asset offering investors exposure to the digitalization of the massive real estate market, while the company’s diversified platform supports up-sell and cross-sell opportunities.
“Across tax, appraisal, and settlement services, Voxtur has Tier1 banks (e.g., Wells Fargo), GSE’s (e.g., Fannie Mae) and public sector customers (2,200 counties in US). These MSAs and relationships will open doors, supported by vendor consolidation by clients,” Sgro wrote in his coverage report.
“The company has a strong appraisal management SaaS platform (recently acquired Anow) which we believe the company is currently working to cross-sell across a large existing base of appraisal and title and closing clients,” he said.
Looking at Voxtur’s peer group, Sgro pointed to Altus Group and Real Matters, but he likes Voxtur’s positioning in the market, along with the current discount it’s sporting compared to its peers — he estimates VXTR to be trading at 3.7x 2022 EV/Revenue compared to its real estate technology group average at 6.7x.
“We believe Voxtur’s growing mix of SaaS revenues and balanced capacities across mortgage cycles serve as valuation tailwinds as compared to peers who are more deeply exposed to origination market cyclicality,” Sgro wrote.
On M&A, Voxtur closed in early April on the acquisition of Appraisers Now Ltd, an automated appraisal workflow management platform for the global appraisal market, with market share in the US and Canada. The price was about $30.5 million with $20.5 million issued in shares and $10 million in cash payment. Voxtur said the acquisition will strengthen the company’s recurring revenue stream and accelerate the development of its data ingestion engine.
Voxtur also has an outstanding LOI for data solutions company Benutech, with Sgro saying the two additions will boost Voxtur’s SaaS revenue.
“With $30 million-plus of PF cash and an estimated FCF positive operating profile, we expect Voxtur to continue to build its platform adding new SaaS technologies and selectively adding tech-enabled services (i.e., appraisal) to serve as a test bed for new technologies while driving margin expansion,” Sgro said.
Overall, Sgro said he expects Voxtur to remain active as it moves forward on its consolidation strategy in rolling up complementary real estate tech assets.
Sgro also had good things to say about Voxtur’s management, which includes CEO Jim Albertelli, who has built multiple tech platforms supporting the real estate industry and holds a 25-per-cent ownership stake in Voxtur, and executive Chair Yeoman, the former CEO of Altus Group. Sgro said Yeoman has assembled a “high calibre” board of directors including political figures and executives at leading Canadian and US financial institutions.
On Voxtur’s financials, the company reported its fourth quarter and full 2020 numbers on April 30, coming in with Q4 revenue of $6.0 million compared to $5.0 million a year earlier and $506,000 in unaudited adjusted EBITDA compared to negative $641,000 a year earlier.
For the year, Voxtur hit $20.5 million for a topline an negative $1.0 million in EBITDA, which compared to $14.9 million and $98,000, respectively, in 2019.
With all the growth happening, Sgro is calling for a big uptick in both top and bottom lines going forward. The analyst is estimating 2021 and 2022 revenue of $63.9 million and $83.3 million, respectively, and 2021 and 2022 EBITDA of $4.3 million and $8.4 million, respectively.
Sgro is starting Voxtur Analytics off with a “Buy” rating and a target price of $1.00, which represents a 6.0x 2022 EV/Revenue multiple and, at the time of publication, a projected one-year return of 45 per cent.
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