Mackie Research Capital Analyst report on September 1, 2015Nice report below with one year target at $2.50
Shares of Patient Home Monitoring (TSXV:PHM) have been under pressure for some time, but Mackie Resarch Capital analyst Russell Stanley says he sees “significant upside” in the telehealth player. On Monday, PHM reported its Q3, 2015 results. The company posted net income (before stock-based compensation, transactional and non-recurring costs) of $3.45-million on revenue of $19.35-million, a topline that was up 255% over the same period last year.
“This was truly a transformational quarter for PHM,” said CEO Casey Hoyt. “PHM’s vision and goals have never changed, we’re only adding to our arsenal. Not only will we continue to make accretive acquisitions that will benefit our shareholders, we will continue to cross-sell to increase revenues post acquisition. In addition to that, PHM will benefit from our organic growth strategy. We feel our organic growth platform will increase revenues in PHM’s existing businesses. This approach resulted in Sleep Management’s revenues growing 100 per cent year over year over the last three years. It’s a proven model that works and it should have an impact on PHM’s bottom line going forward.”
Stanley says the quarter was in-line with his expectations. But the analyst says the market is not appreciating the potential of current and future acquisitions.
“The results of the quarter reflect only a partial contribution from Sleep Management, and we still expect PHM to close additional acquisitions before year end,” says Stanley.
The analyst notes that the contribution of Sleep Management was limited ot just one month in the quarter, and says he expects its fourth quarter contribution to be far more significant.
In a research update to clients Monday, Stanley reiterated his “Buy” rating and one year target price of $2.50, implying a return of 191% at the time of publication.