Beacon Securities analyst Gabriel Leung still likes the looks of\u00a0Quorum Information Systems (Quorum Information Systems Stock Quote, Chart, News TSXV:QIS), after the company's second quarter financials arrived last week. Leung maintained his \u201cBuy\u201d rating and target price of $1.80\/share for a projected return of 78 per cent in an update to clients on Thursday. Founded in 1996 and headquartered in Calgary, Alberta, Quorum is a developer and marketer of the XSellerator dealer management system (DMS) for auto dealerships, which automates, integrates and streamlines all departments and includes full integration with OEM data. Quorum reported its Q2 financials on August 25, headlined by a reported $9.1 million in quarterly revenue to beat the Beacon Securities projection of $8.6 million and produce a six per cent quarter-to-quarter increase, along with a 53 per cent year-over-year increase. The majority of the revenue came from its SaaS service at $6.4 million for an increase of 51 per cent compared to Q2 2020 and a five per cent quarter-to-quarter increase, while also producing $2.4 million in business development centre (BDC) revenue, a nine per cent quarter-to-quarter jump and 55 per cent year-over-year increase. Leung notes that the annual jumps in both SaaS and BDC revenue are attributable to the reversal of COVID discounts Quorum offered its customers in the same quarter last year, and under normalized conditions, SaaS and BDC revenues were up 12 per cent and 30 per cent, respectively. Meanwhile, the company\u2019s EBITDA report slightly missed Leung\u2019s expectations, with the reported $1.1 million coming in below the Beacon Securities estimate of $1.47 million. \u201cThis was a very exciting quarter, delivering the highest organic SaaS growth quarter in the Company\u2019s history. As a result, we achieved five per cent sequential or 20 per cent annualized organic SaaS revenue growth. BDC growth was also strong in Q2 2021, successfully improving BDC gross margins by 30 per cent,\u201d stated Maury Marks, President and CEO, in a press release. \u201cAdditionally, our transformative MyDeal and PowerLane solutions, which allow dealership customers to buy a vehicle online and to have a touchless service experience, are achieving strong market adoption and increasing our \u2018share of wallet\u2019," he said. Quorum got its technology into more businesses in the quarter, adding dealer rooftops to increase its network to 1,025, with its average monthly recurring revenue of $2,091 per customer up from the $2,013 average from last quarter and $1,404 average from last year, with Leung citing cross-selling as a significant factor. The company has also been busy working on improving its products and their integrations, announcing improvements to its Communicator electronic messaging platform to incorporate digital marketing initiatives, completing a Microsoft Azure virtual desktop pilot to deploy XSellerator and eliminate the need for on-premise servers or a Quorum-hosted solution, and expanding its BDC operations to include collision centres. In a press release, Marks called the Azure deployment "a significant opportunity for our dealerships, as we can now leverage the scalability, security and enterprise-grade reliability of Azure." Growth estimates for Quorum are modest in Leung\u2019s view, projecting $36 million in total revenue for 2021 to produce a potential year-over-year increase of 16.5 per cent, while the $39 million projection for 2022 represents a potential 8.3 per cent year-over-year growth. Leung foresees a small dip in the company\u2019s EBITDA for 2021; while the projected $5 million in EBITDA comes in slightly ahead of the $4.9 million posted in 2020, it comes with a lower margin of 13.9 per cent compared to a 15.8 per cent margin in 2020. The projected $6 million EBITDA for 2022 brings back an estimated 15.5 per cent margin. Leung\u2019s valuation data also shows relatively little movement, forecasting a drop in the company\u2019s EV\/Sales multiple from 2.4x in 2020 to a projected 2.1x in 2021 before a further dip to a projected 1.9x in 2022. The EV\/EBITDA multiple projections tell a similar story, with Leung forecasting a drop from 15.5x in 2020 to 15.1x for 2021, followed by a forecasted drop to 12.9x in 2022. Overall, Leung believes Quorum can still leverage more out of its solutions to lead to more prosperous growth moving forward. \u201cWe believe significant cross-selling opportunities remain for QIS and will likely be a priority given the higher probability of success versus displacing an existing provider (particularly XSellerator displacements),\u201d Leung said. Quorum Information Technologies opened Wednesday trading at $1.15\/share on the TSX Venture Exchange. Overall, Quorum\u2019s stock price has risen by 8.5 per cent for the year to date, though it is down 23.5 per cent since peaking at $1.42\/share on February 3. "We believe the stock should benefit from a multiple expansion as positive data points continue to show itself in the form of improvements in auto sales, along with new rooftop wins and (continued) successful up-selling to existing customers," Leung said.