A new partnership and recent upsized equity financing are reasons to be bullish on ad tech company EQ (EQ Stock Quote, Chart, News, Analysts, Financials TSXV:EQ), according to Echelon Capital Markets analyst Rob Goff, who delivered an update on the company on Thursday. Goff maintained his \u201cSpeculative Buy\u201d rating for EQ and raised his target price from $2.20 to $2.40. Toronto-based EQ provides digital marketing services using real-time and advanced analytics to help businesses track and optimize their targeted campaigns. The company announced on Thursday a partnership with Opta Information Intelligence, Canada\u2019s largest property location intelligence provider focused on the insurance industry. Opta will be using EQ\u2019s artificial intelligence and machine learning tech to target customers, with EQ saying a recent proof of concept with a digital insurance company resulted in a 60-per-cent reduction of acquisition costs and a three to five times improvement in new client conversion. \u201cThis unique industry solution provides insurers with layered insights to identify the characteristics of an ideal customer and precisely locate all their digital twins in any geographic region across Canada,\u201d said EQ in a press release. \u201cLeveraging CONNECTION HUB, EQ\u2019s data on-boarding bridge, Opta Digital Edge integrates Opta\u2019s Peril Score into the audience building process enhancing the quality and effectiveness of the data in driving conversions with the right consumers,\u201d EQ said. On the partnership, Goff said it should represent a plus-$1 million contributor to EQ\u2019s topline by the end of 2021 but that it could also lead to inroads into the the United States due to Opta\u2019s US reach and the exportability of EQ\u2019s auto-related work. Other recent announcements from EQ include the closing on February 19 of an overnight marketed public offering of about 7.2 million shares at $1.60 per for gross proceeds of $11.5 million and the company\u2019s announcement on January 21 of $4 million in new client engagements in 2021 after successful proofs of concept in 2020. EQ said in the January 21 press release that its early 2021 pipeline is now \u201cstronger than it has ever been, reflecting both the need for intelligent data solutions and the strength of EQ\u2019s SaaS tools.\u201d On the latter announcement, Goff wrote, \u201cWe understood the clients are agencies where EQ is likely to gain exposure to new end clients. The business is a mix of self and managed services where we would put the data component at ~20%-33%. We would expect data to represent over half of the associated contribution. With the announcement, we booked a positive buffer. At this time, with the Opta partnership and with the funds raised, we are comfortable in raising our PT and modestly lifting our forecasts.\u201d Goff is now calling for 2021 revenue, profit and EBITDA of $14.8 million, $7.3 million and negative $0.6 million, respectively, and 2022 revenue, profit and EBITDA of $22.2 million, $11.3 million and $1.8 million, respectively. On valuation and comparatives, Goff said it\u2019s been tough to find \u201csolid and relevant\u201d comps, given the aggressive premium within ad tech biggie The Trade Desk, saying, \u201cwe are increasingly turning to SaaS AdTech growth premiums as a consideration given their growth valuations.\u201d Goff figures EQ is currently trading at 2021 EV\/Gross Profit of 19.9x and 12.8x at 2022 numbers, which compares with programmatic ad company AcuityAds at 26.4x for 2021 and 21.9x for 2022 and The Trade Desk at 2021 EV\/Net Sales (net sales represent gross profit) of 40.2x and 31.7x for 2022. \u201cWe look for EQ\u2019s Artificial Intelligence or AI-driven data analytics of consumer behaviour to quickly emerge as a differentiated enabler driving client strategy, proprietary marketing and advertising programs,\u201d Goff wrote. \u201cThe Company\u2019s AI capabilities position it as a leader in Canadian location-based analytics. EQ leverages its AI and Machine Learning (ML) with location-based data together with primary data to predict purchase intent and analyze audiences,\u201d he said. \u201cEQ currently works primarily with marquee names across the Media, Telecom, Automotive, and Financial verticals where its data analytics curate target audiences for media buying initiatives with recent success as a tool for capital allocation and broader marketing strategy and competitor analysis. Its success is measured in superior client ROIs that have driven significant contract expansions and no churn amongst top clients,\u201d Goff wrote. Last year, EQ\u2019s share price was up 73 per cent while so far in 2021 the stock is currently at even. At the time of publication, Goff\u2019s increased target of $2.40 represented a projected one-year return of 47.2 per cent. EQ last delivered its quarterly financials on November 18 where its third quarter revenue was up 65 per cent year-over-year and up 15 per cent sequentially to $2.9 million. Gross margin was 50 per cent for the quarter ended September 30 compared to 42 per cent a year earlier and compared to 37 per cent for the Q2 2020. Adjusted EBITDA was a loss of $111,000 compared to a loss of $93,000 a year earlier.