Clarocity Corp CLRYF

Stock Price Target Following Contract Announcements…

[93Darkhorse93]

There has been a lot of talk about what the share price should be once the overhang of debentures is lifted next week and given recent flurry of contract announcements. I will admit I didn’t see the value sub 0.10/share as I didn’t see a path to profitability.  Credit must go to this management team they have been executing flawlessly with all the new deals announced in 2017 and a path to EBITDA positive by Q3/Q4 2017 and profitability in 2018.
 
I feel like a lot of people like myself have been watching this and waiting for the acceleration of revenue growth and you are finally getting it and there could be a lot of money flowing into the name.
 
Projections
- 24M in Revenue in 2017 up 280% YoY followed by 39M in Revenue in 2018 up 63% YoY.
- EBITDA positive by Q4 (could be Q3 depending on development of gross margin)
- Breakeven EPS 2018 with EBITDA of 4M
 
Valuation
Given its margin profile and growth rate putting a 2.0-2.5x sales on 2018 numbers gets you a range of 0.35-0.45 or 0.40/share at the midpoint for upside of 150% upside. 
 
Very valuable asset that could even be a takeout candidate at some point down the road.  I am willing to bet with Stableview Asset Management as this falls right in his sweet spot where he is unmatched in CDN small cap tech space.
 
LONG