Voxtur Analytics nets a target raise from Eight Capital

Eight Capital analyst Christian Sgro is vocal about Voxtur Analytics (Voxtur Analytics Stock Quote, Chart, News, Analysts, Financials TSXV:VXTR), reiterating his “Buy” rating while also raising his target price to $1.50/share from $1.00/share in an update to clients on Wednesday.

With its headquarters located in Toronto, Voxtur Analytics offers data analytics to simplify tax solutions, property valuation and settlement services throughout the lending lifecycle for investors, lenders, government agencies and servicers.

Previously known as iLOOKABOUT Corp., Voxtur Analytics came about after iLOOKABOUT acquired Delaware-based real estate tech company Voxtur Technologies and title, escrow and Florida-based settlement services company Brightline Title.

Sgro’s latest analysis comes after Voxtur released its second quarter financial results, which Sgro noted to be slightly ahead of expectations.

“In our view, the macro remains supportive of Voxtur’s model: a continued low-interest rate environment and the end of the US moratorium on foreclosures, which will gradually reignite the dormant default business,” Sgro said.

Voxtur reported revenue of $18 million in the quarter, marking a 24.7 per cent sequential improvement and a 301 per cent year-over-year increase, while beating the Eight Capital estimate of $16.6 million in the first full quarter since the merger occurred.

The figure also doesn’t include revenue from real estate technology and data solutions provider Benutech, which Voxtur signed a letter of intent to acquire in June, while Sgro notes the acquisition is expected to close in the final quarter of 2021.

Voxtur’s EBITDA results came in below Eight Capital’s expectations, as the company announced it broke even compared to the Eight Capital projection of $1 million in EBITDA.

The company also recently announced the acquisition of Xome Valuations, which provides valuation management products and services to residential real estate clients, for US$15 million, with $6 million coming in common shares valued on the closing date of the acquisition, and the remaining $9 million coming in cash.

“Our mission has always been to become the largest and most trusted provider of data, SaaS-based applications, and tech-enabled services in the property technology space. In a very short timeframe, our team has built the key foundational pieces and established a strategic path for Voxtur’s transition to a SaaS-based revenue model. It is an exciting time for the Company, and I am confident in our team’s ability to execute,” said Jim Albertelli, Voxtur CEO in the company’s August 31 press release announcing its quarterly results.

“What makes Voxtur unique within the property technology landscape is having the only fully digitized, AI-enabled valuation platform in North America, as a result of acquiring Anow in April,” Albertelli added. “The platform is rapidly becoming the industry standard with its end-to-end encryption and customizable workflow that delivers valuation data elegantly and in a secure environment. This will allow our clients to move from an outdated PDF-enabled industry standard to a fully digitized platform with three times the speed and efficiency at a fraction of the cost.”

Voxtur’s newly released results have prompted Sgro to update some of his financial estimates, as he now projects Voxtur will reach $73.6 million in revenue for 2021 compared to the initial projection of $63.9 million, with the new estimate marking a potential 259 per cent year-over-year increase. Sgro then foresees the company reaching $132 million in revenue for 2022 against the initial outlook of $83 million for a 79 per cent potential year-over-year increase, with Sgro conservatively modeling the Xome contribution at $40 million.

Sgro has also modified his views on the company’s adjusted EBITDA, lowering his projection for 2021 to $2.4 million and a three per cent margin while raising his expectations for 2022 to $9 million with a seven per cent margin.

The company’s valuation data also appears to favour Voxtur, with Sgro forecasting a drop in the EV/Revenue multiple from 19x in 2020 to a projected 5.3x for 2021, followed by another projected drop to 3x for 2022. Meanwhile, Sgro projects the company’s EV/adjusted EBITDA to be 43.2x in 2022.

With the company currently trading at 3x 2022 EV/Revenue compared to a rate of 6.4x for its peer group, Sgro believes an expanding SaaS mix and continued execution will drive share price appreciation.

“On balance, we are increasingly confident in the growth and expect new customer and partner announcements through the fall to serve as catalysts and prove our revenue ramp through 2022E,” he said.

At press time, Sgro’s new $1.50 target represented a projected one-year return of 85 per cent. Overall, 2021 has been a positive year for Voxtur’s stock price, registering an increase of 17.9 per cent for the year to date while hitting a high point of $1.36/share on March 1.