Voxtur Analytics should go higher in 2022, says Eight Capital

It’s been a phenomenal year for Voxtur Analytics (Voxtur Analytics Stock Quote, Charts, News, Analysts, Financials TSXV:VXTR), but investors can expect more growth ahead for the real estate data company according to Eight Capital analyst Christian Sgro. In an update to clients on December 24, Sgro reiterated his “Buy” rating and $2.00 target, which at press time represented a projected one-year return of 69 per cent.

Voxtur Analytics announced on December 22 the closing of a brokered private placement for about 21.7 million shares at $0.90 per share for gross proceeds of about $19.5 million. Together with an approx. $500,000 non-brokered private placement, the company took in $20.1 million to add to its balance sheet and grant the company some flexibility to keep up its M&A activity in consolidating real estate and data assets in the US, with Voxtur saying in a press release that the funds will go towards future acquisitions, working capital and general corporate purposes.

Formerly iLookabout Corp, Voxtur has an artificial intelligence-enabled platform for the real estate sector which simplifies tax solutions, property valuation and settlement services for investors, lenders, government agencies and servicers. The company recently reported what Sgro called a strong third quarter which pushed up the analyst’s estimates.

On the new funding round, Sgro wrote, “We expect that the company will continue its pace of buying-and-building in the new year as organic growth priorities come into focus, including expanded market penetration across the company’s settlement and valuation platforms.”

Sgro said after the funding round Voxtur’s pro forma cash is at $31.0 million with debt at $28.0 million. The analyst said the company’s acquisition of Benutech, announced earlier this year, should close before the end of December and that overall Voxtur should turn adjusted EBITDA-positive in the first quarter 2022, which would be consistent with management’s guidance.

“The company noted on its recent conference call that it is prioritizing the acquisition of data assets and the expansion of data analytics capabilities. Acquisitions like Benutech increase Voxtur’s access to North American real estate data, which we expect the company to build into applications across its full spectrum of services,” Sgro said.

“Acquisitions like Xome Valuations are expected to build the company’s appraisal services offering which we think Voxtur can optimize to fit under one platform and drive operational efficiency,” he wrote.

As a result of the busy year — Voxtur acquired companies Apex, Voxtur, Anow and Xome — the company saw its organic and inorganic growth showing up in the company’s Q3 2021 results, which featured revenue up 402 per cent year-over-year (and up 37 per cent sequentially) to $24.7 million. Gross Margin was $9.5 million, up 15 per cent over the previous quarter and up 359 per cent year-over-year, and adjusted EBITDA was a loss of $638,000.

“Voxtur remains focused on becoming the largest and most trusted provider of data, SaaS-based applications, and tech-enabled services in the property technology space,” said CEO Jim Albertelli in a November 29 press release. “We are delighted to report that our momentum continues and has translated into another strong quarter, with 37 per cent quarter-over-quarter revenue growth achieved from Q2 to Q3 2021.”

“Our team has built a solid foundation and established a focused strategic path for Voxtur’s transition to primarily a SaaS-based revenue model. I am confident in our ability to maintain our positive growth trajectory for the remainder of the year and into 2022,” he said.

Over the quarter, Voxtur announced the acquisition of valuation management products and services business Xome Services and Xome Valuation Services and announced (and then closed after the quarter’s end) the acquisition of digital real estate platform RealWealth Technologies.

Looking ahead, Sgro said it’s likely the two largest drivers of growth for the company in 2022 should be an expected rebound in default-related settlement services and the expansion of the company’s Voxtur Valuation platform.

“According to Black Knight, foreclosure starts remain at record lows and we expect these volumes to tick up in the new year. This is reflected in our model and consistent with management’s view that Q1/22 could begin to see a more material pick-up. On the valuation side of the business, we expect that the opportunity to sign on more lenders and increase efficiencies internally will drive revenue growth as well as margin expansion,” Sgro wrote.

By the numbers, Sgro thinks Voxtur will generate full 2021 revenue and adjusted EBITDA of $96 million and negative $0.2 million, respectively, followed by 2022 revenue and EBITDA of $185 million and $9.3 million, respectively. 

On a comparative basis, Sgro estimated that Voxtur currently trades at 3.3x 2022 EV/revenue versus its estate tech peers at 5.9x.

“Our 6.0x multiple target is in-line with peers and reflects the potential for margin expansion in 2022 and execution on organic growth objectives,” Sgro wrote.