Touting its “attractive” financial position in a “rapidly growing market with limited competition,” Paradigm Capital analyst Daniel Rosenberg initiated coverage of Pivotree Inc. (
) with a “buy” recommendation on Friday.
“Pivotree provides end-to-end commerce solutions to enterprise customers,” he said. “The company is differentiated in its deep domain expertise and capabilities in providing managed turnkey commerce solutions. Pivotree is growing rapidly and is well positioned as a differentiated provider of commerce solutions with a large addressable market and limited competition. Its approach is valued by clients and is reflected in the company’s attractive margin profile as well as through the many brand names who entrust their omnichannel commerce infrastructure to the company. Pivotree’s large and growing base of over 170 customers worldwide includes leading brands like Electrolux, Vitamix, Manulife, Canon and Herschel, to name a few. We believe Pivotree is an attractive investment opportunity offering investors exposure to e-commerce trends, with the potential to accelerate growth through M&A.”
Mr. Rosenberg said the Toronto-based firm, which began trading on the TSX on Oct. 30, benefits from a “unique” business model and “differentiated” capabilities.
“Pivotree’s breadth of expertise in leading commerce technologies is a new and differentiated business model,” he said. “The approach limits Pivotree’s direct competition and offers more flexibility and choice in choosing technology solutions for its clients. Pivotree’s capabilities also extend to tailoring solutions to a client’s needs, all of which are highly valued by Pivotree’s customers, and translates into an attractive margin profile for the company at 50 per cent-plus gross margin.”
He set a target price of $13.75 for its shares. The average is $14.75.