The stock is still a “Buy” but Leede Jones Gable analyst Greg McLeish has lowered his target price on Canadian cybersecurity company Plurilock Security (Plurilock Security Stock Quote, Charts, News, Analysts, Financials TSXV:PLUR). McLeish reviewed the latest quarter from Plurilock in a client update on Wednesday, saying there’s strong upside potential to PLUR if the company can come through on its up- and cross-selling initiatives. Vancouver-based Plurilock delivered its third quarter financials on Monday, posting revenue of $30.8 million, effectively doubling its topline from a year earlier, while adjusted EBITDA was a loss of $904,344 versus a loss of $1.3 million a year earlier. “Throughout this quarter, our sales pipeline continued to grow rapidly, and we have secured more customers for our high margin software solutions, most notably, with the Canadian Department of National Defence,” said CEO Ian L. Paterson in a press release. “This further validates our business model of driving customers to our owned software products. Furthermore, our Solutions Division has generated a net income of $0.9 million, which underscores our strategy to acquire profitable cybersecurity companies with reputable customers,” he said. Plurilock’s Q3 topline of $30.8 million was above McLeish’s estimate at $18.4 million, with the analyst chalking up the beat to higher hardware and systems sales. The adjusted EBITDA loss of $904,344 was also better than McLeish’s forecast at $1.3 million. In his comments, McLeish noted that Plurilock, which recently completed two acquisitions, continues to pursue strategic acquisitions to extend its distribution channels and add new top-tier customers and tech assets. But McLeish is a little skeptical of the M&A prospects for PLUR. “While we continue believe that this is a prudent growth strategy, given the current state of the capital markets and the company’s depressed share price it could be difficult to execute on this strategy without diluting existing shareholders,” he wrote. McLeish sees Plurilock’s revenue growing from $36.6 million in 2021 to $66.0 million in 2022 and to $84.8 million in 2023, while its adjusted EBITDA loss is expected to go from negative $4.3 million in 2021 to negative $7.8 million in 2022 and to negative $3.7 million in 2023. With the update, McLeish lowered his target from $1.00 to $0.60 on lower multiples in the sector. “Plurilock currently generates the majority of its revenue from the Solutions Division, which is primarily a value-added reseller of cyber security products. Over the past year, forward trading multiples for value-added resellers have declined from 1.2x price/revenue to 0.6x price/revenue. As a result, we are lowering our target multiple to 0.6x from 1.2x,” he said. “Plurilock remains focused on upselling and cross selling of its high-margin products and services to its existing client and if the company is successful with this initiative, it will have a material impact on revenue and margins. Once this happens, we believe that a multiple expansion would be warranted,” McLeish wrote. At press time, McLeish’s new target represented a projected one-year return of 233 per cent.