Eight Capital analyst Kiran Sritharan is holding the line on Tribe Property Technologies (Tribe Property Technologies Stock Quote, Charts, News, Analysts, Financials TSXV:TRBE) after reviewing just-released quarterly financials from the company. In an update to clients on Thursday, Sritharan reiterated a “Buy” rating and $3.50 rating, saying Tribe’s top and bottom lines should be growing this year.
Tribe Property is a Vancouver-based company providing property management solutions along with a resident community platform and marketplace and developer and landlord software tools. Tribe reported its first quarter 2023 financials on Tuesday, with revenue up 11 per cent year-over-year to $4.7 million and gross profit of $1.8 million compared to the same a year earlier. Adjusted EBITDA was pegged at negative $1.9 million compared with negative $1.5 million a year earlier.
Operationally over the quarter, Tribe signed up six new property developers, five Tribe Home Pro software licensing agreements, nine property management agreements and nine new communities were onboarded.
The company said it has a robust pipeline of development opportunities, partnerships and software agreements to fuel growth.
“Management is optimistic that 2023 will be a strong year for Tribe, expecting improved revenue, profitability and expanding margins. Despite concerns surrounding the real estate sales market and potential economic downturn, these factors have not hindered Tribe’s growth opportunities thus far,” Tribe said in a press release.
Sritharan said the Q1 topline of $4.7 million was a bit behind the consensus call at $5.0 million, while the $1.9 million EBITDA loss was in-line with Street estimates. The analyst noted that management is focused on expanding its footprint in Ontario, which Sritharan said is the market with the best growth prospects across the country for Tribe.
“The Q1/23 print landed just behind the Street’s estimate, but management was positive on growth ahead as it looks to expand in the fast-growing province of Ontario. Despite its premium offering, the increase in MRR/community reflects the improving portfolio Tribe manages. New communities expected to come online through the year should benefit the margin profile. We expect a steady uptick in revenue and profitability throughout the year,” Sritharan said.
Lower than expected software and services revenue in the first quarter prompted the analyst to lower topline estimates going forward for Tribe. Sritharan is now calling for full 2023 revenue and adjusted EBITDA of $20.1 million and negative $6.1 million, respectively, and for 2024 revenue and EBITDA of $24.6 million and negative $3.1 million, respectively.
At the time of publication, Sritharan’s $3.50 target represented a projected return of 204 per cent.