Analyst Estimates Still have to Go Much Higher…This is going to be another name like Tio Networks in the second half of 2016 where the numbers start exploding higher and the analyst have to stumble over each other to raise estimates and the stocks will move higher on valuation expansion and EPS/EBITDA growth.
Here’s my Case;
In Q2 which will be reported soon will have 100 Self Service Partners on partner growth of 28% QoQ and 355% YoY. In Q2 in 2015 Self Service revenue was 1.07M or 36K/Partner. So if I assume only 10% organic growth per partner to 39K that is Self Service revenue of 3.9M add to that another 3.6M for Managed Services (4% Organic Growth) and you have total revenue of 7.58M or revenue growth of 66% YoY and with strong EBITDA margins Acuity could be EBITDA positive into perpetuity.
Using the same conservative growth estimates of 20% growth in Partners on 10% organic growth per Partner and 4% growth in Managed Services and you get to 35M in sales when analysts are only at 29.6M for 2016.
Given gross margins in the 50% range that should increase with scale and increasing EBITDA margins trading right now at 1.2x 2016 sales estimates is too low. On a 2x sales figure on analyst estimates is about 2.4/share on what I feel are 2016 sales would be 2.78/share. Either way much higher.
This name could run up hard this summer with the investor tour that management is participating in the end of July to August when institutional investors get to know the story and with Q2 Numbers being released. I keep trying to get into this name on a day when the market sells off but this name just keeps holding up and I am running out of time before it ramps up without me again.
Special thanks to Colin Fisher from Stableview for introducing this one on BNN.