This analyst just timmed his price target on Pivotree

Paradigm Capital analyst Daniel Rosenberg lowered his target on Pivotree (Pivotree Stock Quote, Chart, News, Analysts, Financials TSXV:PVT) to $2.25 from $2.50 in a May 14 report, maintaining a “Buy” rating after first-quarter results came in line with expectations.

Rosenberg said the lower target reflects his updated blended valuation, but said Pivotree remains an attractive transition story as it shifts away from legacy services toward higher-quality managed IP solutions.

Pivotree reported Q1 revenue of $13.9-million, down 27.6% year-over-year. Legacy Managed Services revenue fell 52% to $2.1-million, while Professional Services declined 29% to $7.9-million. Managed IP Solutions revenue rose 8% to $4.0-million, driven by AI-enabled solutions.

Adjusted EBITDA was $1.2-million, ahead of Rosenberg’s $0.7-million estimate, while gross margin reached a company-record 47.3%.

Rosenberg said Pivotree has improved margins through cost optimization and internal use of AI, while maintaining a debt-free balance sheet with $12.4-million in net cash and an unused $8-million credit facility.

The analyst said top-line growth will take more time as customers face longer sales cycles and discretionary IT caution, but the company is better positioned with a rightsized cost base and self-sustaining cash generation.

Rosenberg expects Pivotree to generate Adjusted EBITDA of $3.9-million on revenue of $55.4-million in fiscal 2026, improving to $5.7-million on revenue of $60.6-million in fiscal 2027.

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