VerticalScope wins price target raise at Beacon

Its fourth quarter results are in the books and Beacon Securities analyst Gabriel Leung has raised his price target on VerticalScope (VerticalScope Stock Quote, Chart, News, Analysts, Financials TSX:FORA).

On March 12, FORA reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of $10.1-million on revenue of $19.9-million, a topline that was up 11%, year-over-year.

“I am very proud of what our team accomplished in 2024. We grew our revenue by double-digits organically and have vastly improved our financial position which will allow us to aggressively pursue growth in the year ahead. For the full year, revenue increased by 13% and Adjusted EBITDA by 27%,” CEO Rob Laidlaw said. “Q4 saw a continuation of the strong trends we’ve experienced over the past several quarters. MAUs grew 6% YoY to 114 million while revenue improved by 11%, led by strength in both programmatic and direct advertising channels.”

Leung says these results were better than he expected, but says it may take time to work through to the share price.

“In our opinion, given the q/q decline in MAU in Q4, along with expectations of flat MAU growth in Q1, the market will likely wait for additional data points before rewarding the company with a more aggressive trading multiple and organic growth outlook,” he wrote. “That being said, we continue to maintain our positive disposition on VerticalScope given its strong financial metrics, compelling product roadmap, M&A optionality given its strong FCF generation and low leverage ratio, and potential upside from a high margin data license deal (which the company believes it can close the year).”

In a research update to clients March 24, Leung maintained his “Buy” rating and raised his price target on the stock from $17.50 to $19.50, implying a return of 111% at the time of publication.

The analyst thinks the company will post EBITDA of $33.5-million on revenue of $73.6-million in fiscal 2025. He expects those numbers will improve to EBITDA of $36.0-million on a topline of $78.9-million in fiscal 2026.