Qipt has huge upside scale that should enable a growing free cash flow stream.”
In a research update to clients December 19, Cooper maintained his “Buy” rating and one-year price target of $18.50 on QIPT, implying a return of 201 per cent at the time of publication.
Cooper thinks QIPT will post EBITDA of $61.1-million on revenue of $263.3-million in fiscal 2024. He expects those numbers will improve to EBITDA of $68.1-million on a topline of $289.6-million the following year.
“We believe the market is under-estimating AND under-valuing this high margin, recurring revenue stream. As QIPT continues to grow its patient base, the re-supply business will continue to grow and have a positive impact on EBITDA margins and free cash flow. The question is what is the value of that patient? Given the free cash flow from the resupply business, that segment should be valued at 12x or more while the lower margin leasing EBITDA contribution perhaps at 4x. Using that math, you arrive at a per share value of $13.50 or C$18.50,” the analyst concluded.