WISH stock is very undervalued, Haywood says

Following the company’s third quarter results, Haywood analyst Gianluca Tucci has maintained his “Buy” rating on Wishpond Technologies (Wishpond Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:WISH).

On November 16, WISH reported its Q3, 2023 results. The company posted Adjusted EBITDA of $319,001 on revenue of $5.76-million, a topline that was up from $5.48-million in the same period a year prior.

“The first nine months have been a period of transition in which we launched Propel IQ, the company’s next-generation marketing platform, and then retrained and restructured our sales team to sell this new bundled product offering,” CEO Ali Tajskandar said. “This has resulted in slower growth in 2023, however, we are now experiencing an acceleration of Propel IQ sales and have thus resumed the expansion of our sales team. Over the past two months, we averaged over 3-per-cent month-over-month growth in MRR [monthly recurring revenue], driven by increased sales of Propel IQ, which is also having an impact on increasing gross margins and lowering customer churn.”

Tucci summarized the results.

“WISH reported Q3/23 results which met EBITDA expectations,” he said. “At Q3/23, WISH had $0.9M in cash and a $6M undrawn credit facility with a major Canadian bank. WISH is in the process of ramping its sales staff from ~45 to 50-60 by year-end, to further drive organic growth with Propel IQ. The Company noted growth QoQ should increase into 2024 – WISH has seen 3% m/m MRR growth over the last two months. The introduction of Propel IQ yields WISH higher margins and increased customer retention – 15% of revenue in Q3 was derived from the new Propel IQ offering.”

In a research update to clients November 17, Tucci maintained his “Buy” rating and one-year price target of $1.40 on WISH, implying a return of 250 per cent at the time of publication.

The analyst thinks WISH will post Adjusted EBITDA of $1.3-million on revenue of $23.2-million in fiscal 2023. He expects those numbers will improve to Adjusted EBITDA of $2.1-million on a topline of $28.3-million the following year.

Disclosure: Wishpond is an annual sponsor of Cantech Letter