Analyst ReactionsCanaccord still looking for a double. GLTA
Acumen Capital analyst Jim Byrne thinks Sangoma Technologies Corp.‘s near-term outlook is “a little less clear” as its new leadership group delineates their strategy.
Alongside the release of in-line fourth-quarter results on Wednesday, the Markham, Ont.-based company suspended its 2024 earnings guidance as “part of a strategic transformation led by the Company’s new CEO, Charles Salameh to position Sangoma for long-term success and sustainable growth.”
“We believe the long-term story for Sangoma is stronger now with the new senior leadership team in place,” said Mr. Byrne. “They are an experienced team with the opportunity to take the company to the next phase of its development. The focus on assembling the right services mix, the proper bundling of those services, and targeting the best markets for STC should happen over the next few quarters.”
The analyst emphasized the new team is “confident in the continued growth in the higher margin services revenue stream, which should support margins in similar levels to the past number of quarters.”
Maintaining a “buy” rating for Sangoma shares, he trimmed his target to $8 from $10 “mainly due to lower valuation multiples.” The average is $11.52
“STC shares trade at a significant discount to the peer group and we believe the shares are quite attractive at these levels,” he said. “Like STC, peers such as 8x8 and Ring have been under pressure with significant margin compression in the past two years.”
Elsewhere, Canaccord Genuity’s Robert Young cut his target to US$8 from US$10 with a “buy” rating.