Quisitive Technology Solutions Inc. (QUIS:TSX.V) is "undervalued against consolidated valuations" as it commercializes PayiQ, its rebranded payment solutions platform, reported Echelon Capital Markets Rob Goff in a July 6 research note.
Significant investment gain
Goff noted the U.S. company, a developer of cloud technology solutions and products and a Microsoft partner, is currently trading at CA$0.36 per share while Echelon's target price on it is CA$1.25 per share. This price difference represents a significant potential return of 252%.
"We see upside to baseline, consensus forecasts given the positive leverage of PayiQ as it first reduces its drain then turns EBITDA positive," Goff wrote. "Our CA$1.53 sum-of-the-parts valuation looks aggressive yet finds support in its valuation assumptions and peer transactions."
Echelon rates the Texas-based firm Speculative Buy.
Possible stock catalysts
In his report, Goff outlined what Echelon expects from PayiQ during the short and medium term.
As commercialization of the platform continues, Quisitive is expected to migrate BankCard merchants onto it as well as land new PayiQ clients. Revenue from migrations alone, Echelon estimates, could be as much as $4.5-5 million and could afford 85%-plus gross profit over the next two to three years.
"We continue to see the potential for Quisitive to acquire independent sales organizations at 10 times enterprise value:EBITDA or six to seven times adjusted for savings, upon migrating payments onto the PayiQ platform," Goff wrote.
Adding shareholder value
Overall, Echelon expects Quisitive to continue double-digit organic growth and restart efforts to grow inorganically through acquisitions. They could lead to Quisitive selling minority interests in some of its divisions, which, in terms of benefits, "holds the potential to crystallize value, establish currency for acquisitions and potentially engage a strategic partner."
"Over the longer term, accretive IT Services acquisitions are expected to add shareholder value as Quisitive leverages revenue synergies and scale efficiencies," Goff commented.
| Want to be the first to know about interesting Technology investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
For additional disclosures, please click here.
