A quarter that saw some bottom-line metrics best his expectations has Cantor Fitzgerald Canada analyst David Tomljenovic raising his price target on International Road Dynamics (International Road Dynamics Stock Quote, Chart, News: TSX:IRD). Yesterday, International Road Dynamics reported its Q3,2016 results. The company earned $1.41-million on revenue of $18.3-million, a topline that was up 16 per cent over the same period last year. "Our strong operating performance continued in the third quarter, underpinned by a significant increase in gross margin and further growth in our solid base of recurring service and maintenance revenues," said CEO Terry Bergan. "Looking ahead, we continue to believe fiscal 2016 will be another year of record revenues and net earnings as we continue to leverage our strong presence in the growing global ITS market. With our improved profitability and cash flow, we increased our focus on development projects to enhance our current product lines and introduce new solutions to our customers. A key new innovative product is our recently launched VectorSense tire sensor suite and the related Vehicle Information-In-Motion (VI2M) traffic data collection system. We are confident these advanced, leading-edge ITS solutions will meet the needs of our customers for the enhanced data necessary for improved tolling, increased road safety and more informed decisions on infrastructure spending." Tomljenovic says IRD's revenue number came in a little lower than his expectation of $18.6-million, but both gross margin and EBITDA bested what he had modeled. His overall takeaway is that this was a very good quarter for the company. "IRD’s quarter was very positive," says the analyst. "The top line number shows there is strong demand for products in this marketplace, with higher margin products in demand this quarter. The macro trend focusing around congestion is one that will never go away, so there is a long cycle for IRD to take advantage of. We believe that products such as VectorSense are the future for IRD. Greater sensing capabilities produce increasingly valuable and more highly sought after data that will be extremely profitable for IRD. Additionally, the market has accepted the product’s pricing. Next generation sensors selling at market rates will begin to transform IRD’s gross margins which should flow down in a levered manner to the Company’s EBITDA and net income lines. The launch of new sensors is starting to roll out as the Company mentioned in its press release. Investors should be focusing on the future opportunities that already exist within IRD." In a research update to clients today, Tomljenovic maintained his "Buy" rating on International Road Dynamics, but raised his one-year price target on the stock from $2.50 to $3.00, implying a return of 37 per cent at the time of publication. Tomljenovic believes IRD will generate EBITDA of $5.6-million on revenue of $66.3-million in fiscal 2016, numbers he expects to improve to EBITDA of $6.5-million on a topline of $72.9-million the following year.