The fourth quarter came as expected and the Q1 2021 is looking good. That\u2019s the assessment of EMERGE Commerce (EMERGE Commerce Stock Quote, Chart, News, Analysts, Financials TSXV:ECOM) from Steven Li, analyst for Raymond James, who delivered an update to clients on Friday, where he reasserted his \u201cOutperform 2\u201d rating for the stock. Toronto-headquartered EMERGE Commerce is a diversified acquirer and operator of direct-to-consumer (D2C) brands in North America. Emerge acquires e-commerce businesses in niche verticals that either are underserved or have a unique way of operating. EMERGE has so far acquired companies such as TruLocal, UnderPar.com, WagJag.com, JustGolfStuff.ca and BeRightBack.ca. EMERGE released its fourth quarter and full 2020 financials on April 22, showing Q4 revenue of $2.4 million, up 31 per cent year-over-year, and positive adjusted EBITDA of $0.1 million compared to negative $0.15 million a year earlier. For the year, revenue was up 121 per cent to $9.2 million and EBITDA hit $0.8 million compared to negative $0.6 million in 2019. Emerge said gross merchandise sales for the year were $29.4 million compared to $15.2 million in 2019. Q4 2020 was a busy quarter for EMERGE, which arrived as a public company on the TSX Venture in December via an RTO with Aumento Capital and completed the acquisition of D2C premium meats company truLOCAL on December 31. \u201cSimply put, 2020 was a transformative year for EMERGE. Revenue more than doubled while the Company became Adjusted EBITDA positive. We successfully completed our go public transaction, strengthened our balance sheet, and shortly after, acquired truLOCAL, adding $20 million in subscription revenue, with strong organic growth, in addition the transaction was accretive on Day 1,\u201d said Ghassan Halazon, Founder and CEO, in a press release. In his review, Li said the fourth quarter was in line with expectations, with the Q4 revenue of $2.4 million comparing to the consensus call for $2.3 million and the adjusted EBITDA of $0.1 million in line with the consensus $0.0 million. Li said the first quarter 2021, which should be reported in a few weeks, appears to be shaping up well, in part due to the first quarter of contribution from TruLOCAL. The company\u2019s largest acquisition to date, TruLOCAL has achieved 117-per-cent year-over-year growth and has exceeded management\u2019s expectations in terms of both revenue and EBITDA, according to corporate updates. \u201cIn February, TruLOCAL achieved growth of +116 per cent year-over-year with continued profitability,\u201d wrote Li. \u201cIn the same month, TruLOCAL expanded into Quebec, Canada's second-largest province and truLOCAL's fifth market, overall. Management continues to see additional opportunities to increase membership (and also recurring revenue) in F2021.\u201d \u201cIn Jan, JustGolfStuff recorded over +515 per cent year-over-year growth in GMS, which surpassed Christmas shopping levels. In March, the business grew 357 per cent year-over-year in GMS as sales momentum continues through April. In April, JustGolfStuff also expanded into the large US market. As consumers shift their spending online at an accelerated rate, we believe ECOM stands to benefit from the current e-commerce surge and the resulting strong organic growth profile of the businesses they acquire,\u201d Li said. Li said EMERGE\u2019s M&A pipeline is growing, where the company\u2019s current lineup of potential targets (including multiple signed LOIs) now combine for about $58 million in EBITDA, up from $35 million. The analyst also noted EMERGE\u2019s fourth quarter positive free cash flow of $1.0 million. \u201cWith over $20 million cash (after the $12.1 million private placement), we believe ECOM has plenty of firepower to advance its acquisition pipeline in 2021,\u201d Li said. The analyst is calling for EMERGE to generate 2021 and 2022 revenue of $33 million and $38 million, respectively, and 2021 and 2022 EBITDA of $1 million and $2 million, respectively. On valuation, Li is using a 3.0x multiple on next 12 months revenue, which is at a premium to meal kit companies at 1.5x-2.0x. Li\u2019s reiterated \u201cOutperform 2\u201d rating is paired with a maintained $2.75 target price, which at the time of publication represented a projected 12-month return of 162 per cent. ECOM started out at $0.84 per share on December 14, 2020, and has since been up and down, currently trading around the $1.10 mark. The stock hit a high of $1.59 on February 10. Earlier this month, EMERGE gave a corporate update on its golf business, with strong organic growth in gross merchandise sales over March and sales momentum continuing through April. EMERGE said JustGolfStuff.com had its largest month ever in March, where its year-over-year growth reached 357 per cent after a re-launched website late in the quarter which added hundreds of products to the site. EMERGE also announced the launch of JustGolfStuff.com across the United States \u201cJustGolfStuff is currently our fastest growing brand across the portfolio and we are excited about the upcoming US launch, a multi-billion dollar market, where we are in a position to advertise products nationally to our extensive US golf subscriber base from Day 1, at no incremental marketing cost,\u201d said Halazon in an April 14 press release.