You need to own Wishpond stock, PI says

Following new data from Wishpond (Wishpond Stock Quote, Chart, News, Analysts, Financials TSXV:WISH), PI Financial analyst Jason Zandberg has maintained his bullish price target on the stock.

On March 5, WISH announced that on the one-year anniversary of its Propel IQ platform the company has more than 500 customers and has experienced a 10x increase in monthly recurring revenue at an 80 per cent gross margin. WISH management says the customer churn on the product is 40 per cent lower than its one-off customer base.

“Propel IQ is putting Wishpond on track for its next stage of growth, “CEO Ali Tajskandar said. “We believe that our investment of time and resources in the past year is yielding a very promising growth trajectory for the platform, with over 500 customers currently subscribing to Propel IQ. Furthermore, transitioning from our traditional silo offerings to a self-serve model with a fully integrated and bundled software platform is allowing the Company to improve its gross margins and customer retention, while providing our customers access to a full featured digital marketing platform. Looking ahead, we anticipate the growth of Propel IQ to continue this trajectory and become a cornerstone for growth and profitability for Wishpond.”

Zanberg says this development represents the next leg-up for the company.

“WISH is advancing towards its next growth phase, driven by developments from the Propel IQ platform. We see WISH’s transition from conventional segmented offerings to a self-service model with a fully integrated and bundled software platform enhancing the Company’s gross margins and customer retention,” he said.

In a research update to clients March 5, Zandberg maintained his “Buy” rating and one-year price target of $1.50 on WISH, implying a return of 212.5 per cent at the time of publication.

On a multiple basis, our C$1.50 target price equates to an EV/Sales of 0.7x and 0.6x on our FY24 and FY25 estimates, respectively, the analyst concluded.

Disclosure: Wishpond is an annual sponsor of Cantech Letter.