Is Snipp Interactive (TSXV:SPN) a buy?

Paradigm Capital analyst Daniel Rosenberg says Snipp Interactive (Snipp Interactive Stock Quote, Chart, News, Analysts, Financials TSXV:SPN) is making steady progress, though a return to consistent profitable growth will take time.

In an Aug. 31 update, Rosenberg reiterated his “Buy” rating and $0.10 target on Snipp.

“We see a meaningful opportunity for Snipp to scale within its existing client base through both geographic and brand portfolio expansion,” Rosenberg said.

Snipp reported Q2 revenue of $6.0-million, up 24.6% year-over-year and ahead of Rosenberg’s $5.1-million estimate. Revenue also improved from $5.0-million in Q1.

Gross profit was $3.3-million, representing a 55.7% margin. Adjusted EBITDA was $200,000, ahead of Rosenberg’s forecast for a $300,000 loss.

Bookings backlog was $19.1-million, up from $15.2-million a year earlier, with revenue expected to be recognized over several years.

Rosenberg said backlog and cost controls are supporting profitability, while management expects further efficiency gains in coming quarters.

Snipp ended Q2 with $6.2-million of cash and $2.7-million of debt. In Q1, the company closed a $4.5-million senior secured convertible debenture financing led by strategic investor Shen Capital.

Rosenberg said the outlook remains cautious because macro volatility continues to affect customer spending. Still, he said Snipp is moving toward a healthier operating model and management expects an EBITDA inflection in 2027.

Snipp also announced a partnership with Inmar Intelligence to bring digital grocery incentives to consumer banking apps. Inmar’s retail network covers 200-million shoppers across North America and more than 40,000 retail locations.

Rosenberg values Snipp using a blend of discounted cash flow and one times his 2027 revenue estimate. He said the stock trades at 0.3 times 2027 EV/revenue, compared with its peer group median of 1.4 times.

The analyst expects Snipp to generate Adjusted EBITDA of $100,000 on revenue of $22.8-million in fiscal 2026, improving to Adjusted EBITDA of $1.1-million on revenue of $23.2-million in fiscal 2027.

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