Wishpond is still undervalued, Eight Capital says

Following the company’s most recent quarterly numbers, Eight Capital analyst Christian Sgro remains bullish on Wishpond Technologies (Wishpond Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:WISH)

On August 17, Wishpond reported its Q2, 2023 results. The company posted EBITDA of $215,926 on revenue of $5.64-million, a topline that was up 13 per cent over the same period last year.

“We are very pleased with our second quarter results in which Wishpond achieved positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] for the fourth quarter in a row, demonstrating our commitment to profitable growth,” CEO Ali Tajskandar said. “During the first six months of 2023, we generated $400,000 of positive adjusted EBITDA compared with an adjusted EBITDA loss of $600,000 in the first six months of last year — an outstanding improvement of over $1-million, which we are extremely proud of achieving. Wishpond’s cost optimization efforts over the past year have contributed to the company’s positive adjusted EBITDA profile. Based on the company’s performance and growth momentum in the first half of the year, we expect to deliver strong results for the remainder of 2023. We maintain a positive outlook for the second half of 2023, with continued sales growth and improving cash flows.”

Sgro says it appears to be onward and upward for WISH, although the revenue number did miss consensus, which was $5.9-million.

“Wishpond reported growth behind the Street, resetting this year’s outlook below 30% y/y and checking back our estimates,” he said. “Management remained upbeat on the market opportunity, refocusing the sales strategy around an evolving suite of AI and martech tools that drive ROI for clients. Cash flow performance met our expectations, with Wishpond balancing growth investment with break-even profitability. We continue to model an acceleration in organic growth in the seasonally stronger back half of the year.”

In a research update to clients August 18, Sgro maintained his “Buy” rating and one-year price target of $1.30 on Wishpond.

The analyst believes WISH will post Adjusted EBITDA of $1.6-million on revenue of $24.5-million in fiscal 2023. He expects those numbers will improve to EBITDA of$2.6-million on a topline of $30.4-million the following year.

Disclosure: Wishpond is an annual sponsor of Cantech Letter