Q3: 22% Rev Growth w 239% adj EBITDA growth…This company continues to deliver, even with all the fears of polyethylene pricing, fears of hurricanes coming through Florida and CAD dollar strengthening they still put up 20%+ growth. With Advaseal product launching in 2018. Throw in a guidance raise for the remainder of 2017 and all things look like they came up aces.
Revenue
Up 22.3% YoY with growth across all business lines and geographies (What else can you ask for) Would just point out another 1.5M in Shine N Ripe revenues in the Q so that leaves still at least 1M in revenues to be recognized in Q4 still. BULLISH!!!
Gross Margin
Profit Dollars up 82% YoY and gross margin up to 14.73% (Q3 2016: 9.90%). A 50% improvement in gross margin in just a year thanks to economies of scale and Shine N Ripe revenues which will continue to accelerate in 2018.
Profitability
Up 239% once you adjust for FX is just massive driven by the combo of margin expansion and top line revenue growth with a stable cost structure. Defiantly a runway for 10%+ EBITDA margin looking out to 2018 which would be huge.
Valuation
Bumping up my 2018 Revenue estimates for IFX.V to 100M with a 17.5% Gross Margin gets me to EBITDA next year of 11.5M. Throw on a 10-12x EBITDA multiple on that given the growth rate they are putting up on 50M shares and I get to a target price of 2.30 – 2.75/share or 2.53/share at the midpoint or over 140% upside!!!
Core business continues to grow double digits with the upside catalyst of Advaseal commercialization into the first half of 2018 gives you multiple growth drivers all at a discounted valuation. Back to all time highs for the stock.
LONG