Snipp Interactive is a buy, Paradigm says

Following the company’s third quarter results, Paradigm Capital analyst Daniel Rosenberg has maintained his “Buy” rating on Snipp Interactive (Snipp Interactive Stock Quote, Chart, News, Analysts, Financials TSXV:SPN).

On December 2, SPN reported its Q3, 2024 results. The company posted EBITDA of $708,649 on revenue of $6.7-million, a topline that was down 22%, year-over-year.

“Q3 2024 represents a pivotal moment in Snipp’s history as we achieved record-breaking quarterly EBITDA -a testament to our strategic focus on high-margin revenue streams and operational excellence,” CEO Atul Sabharwal said. “The early performance of SnippMEDIA, now reaching over 30 million monthly active users and achieving strong engagement metrics, along with continued strength in our core business, highlights our ability to deliver innovative solutions and potential high growth opportunities in the future that can only add to the continued growth of our business. With a near record bookings backlog in the core Snipp business and exciting integrations/launches planned for SnippMedia in 2025, we are well-positioned to build on this momentum and drive long-term value for our clients and shareholders.”

Rosenberg summarized the quarter.

“Snipp reported Q3 results that were positive and generally in line with previously released guidance,” he wrote. “Margin improvements more than offset a top-line contraction as the company focuses on revenue mix optimization. Gross profit grew 50% y/y despite a purposeful running off of legacy revenue. We are seeing Snipp move toward a more sustainable business, something the company has been working toward for the past several quarters. The company is seeing success with SnippMedia and outside of its flagship Bank of America contract, it is gaining momentum with a pipeline into many regional banks.”

In a research update to clients December 4, Rosenberg maintained his “Buy” rating and price target of $0.25 on SPN, implying a return of 117% at the time of publication.

The analyst thinks the company will post Adjusted EBITDA of $600,000 on revenue of $23.2-million in fiscal 2024. He expects those numbers to improve to Adjusted EBITDA of $2.2-million on a topline of $25.3-million in fiscal 2025.

“We value Snipp using an EV/2025e revenue multiple of 1.5x and a DCF, resulting in our blended C$0.25 target price (unchanged),” the analyst added. “Our comparable group consists of loyalty and marketing software providers, consumer analytics and advertising agencies. The group trades at an average 2.7x EV/2025e revenue while Snipp trades at 0.6x. We see Snipp laying the foundation to create sustainable long-term value creation. We continue to see undervalued tech at current levels.”