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Tribe Property Technologies has an 86 per cent upside, says Laurentian

The new quarterly numbers look good on Tribe Property Technologies (Tribe Property Technologies Stock Quote, Charts, News, Analysts, Financials TSXV:TRBE), according to Laurentian Bank Securities analyst Frederic Blondeau. In a Monday report on Tribe, Blondeau reiterated a “Speculative Buy” rating and $3.00 target price, saying Tribe continues to progress on every front.

Vancouver-based Tribe Property Technologies, a tech-enabled property management services business, reported its first quarter 2023 results on May 30, coming in with revenue up 11 per cent year-over-year to $4.7 million, gross profit of $1.8 million and adjusted EBITDA of negative $1.9 million compared to negative $1.5 million a year earlier.

Operationally over the quarter, Tribe completed the acquisition of property management assets in the Greater Vancouver Area from Warrington PCI Management, it deployed nationwide its VendorPM property management platform and it launched a proprietary platform integration through its Tribe Home Pro digital solutions for real estate developers.

For the 2023 year, management said it expects revenue, profitability and margins to all improve despite concerns over the real estate market and wider macro conditions. Its goals for 2023 include increasing monthly recurring revenue through both organic and inorganic means, expanding its acquisition pipeline with a special focus on the Greater Toronto Area, driving efficiencies, continuing to develop its software product line and onboarding new developers and driving new digital services revenue.

WISH"

“This year our commitment extends beyond onboarding new communities as we are fully dedicated to optimizing efficiencies within our operations,” commented Tribe CEO Joseph Nakhla in a press release. 

“Through process improvements, cost optimizations and consolidation of back-office systems, we are continuing to execute our cost reduction strategies.  As we delve deeper into exploring efficiencies, we recognize immense opportunities to bolster the company’s profitability,” Nakhla said.

Looking at the quarterly results, Blondeau said Tribe’s adjusted EBITDA arrived in-line with his estimates, while revenue was slightly lower than anticipated, with the difference being chalked up to timing of revenue recognition. 

Blondeau said his positive outlook on TRBE for 2023 and 2024 remains intact and he pointed out that developers are increasingly seeking automation and solutions to lower their overhead.

“TRBE has never been exposed to such a large number of leads and sent out proposals,” Blondeau wrote. “On the external growth front, management reiterated being actively seeking acquisition opportunities, of scale when possible and applicable, with a particular focus on the GTA, which would strengthen its foothold in Ontario.”

“Management indicated being engaged in negotiations with multiple targets, and expects to make announcements in the coming months. For these reasons, especially when considering the current discount between our intrinsic value/share estimate and the share price, we maintain our favourable views on TRBE,” he said.

Blondeau noted the six new property developers Tribe signed on over the Q1, the five Home Pro software licensing agreements for new construction projects, nine property management agreements, nine communities on-boarded and three additional phases of Tribe-managed communities on-boarded.

“Generally speaking, management anticipates a continued surge in community onboarding for management services and software usage, extending throughout H2/23. Ultimately, a record number of communities is expected to be added to TRBE platforms and services in 2023,” Blondeau said.

By the numbers, the analyst is expecting Tribe’s sales to hit $20.0 million in 2023 and $24.3 million in 2024. Adjusted EBITDA is forecasted to be negative $7.1 million in 2023 and negative $5.1 million in 2024.

At press time, Blondeau’s $3.00 target represented a projected one-year return of 87.5 per cent.

Disclosure: Tribe Property Technologies is an annual sponsor of Cantech Letter.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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