Upgrades Several analysts raised their price targets on Information Services Corp (ISV-T +6.98%increase
) following an earnings beat this week and the company revealing a five-year plan to double revenue.
CIBC raised its target price to C$32 from C$31; RBC raised its target price to C$27 from C$24; and Raymond James increased its target to C$34 from C$27.
The company, which provides registry and information management services for public data and records, reported revenue of $57.5 million versus consensus at $56.2 million. Reported adjusted EBITDA of $21.3 million was also ahead of consensus at $20.2 million.
“While the smallest of ISV’s reporting segments, Technology Solutions has shown a marked improvement in results after Covid led to many project delays and declining growth for the last 2 years,” commented Raymond James analyst Stephen Boland. “The performance across this segment was a positive surprise this quarter and management expects continued momentum in 2024.”
Mr. Boland noted that the new strategic goal to double both revenue and EBITDA over the next five years will be achieved through a combination of organic growth and selective M&A. “Despite these ambitions, ISV remains committed to reducing the company’s leverage towards its long-term target of 2.0x-2.5x debt-to-EBITDA.”
“Heading into 2024, the recent fee adjustments on the MSA renewal positions the company well for a solid year of double-digit revenue and 20%+ EBITDA growth. In addition, we may see further upside to our current estimates if real estate activity improves sequentially through the year (the market is currently being held back by low supply). Monetary policy is likely to be an important factor in this regard. Regardless, ISV remains one of the most resilient and high-quality businesses in our coverage,” Mr. Boland said. He is maintaining an “outperform” rating.