Think Research Corp. (
) is “raising the standards in digital health,” said Canaccord Genuity analyst Doug Taylor.
He initiated coverage of the Toronto health-tech company, which went public at the end of December, with a “buy” rating on Monday.
“Think Research leverages a core set of technology assets focused on improving healthcare outcomes by better organizing and standardizing clinical knowledge and resources,” he said. “We believe the shares are reasonably valued relative to healthcare technology peers, at 4.5 times EV/Sales (2021 estimates), given the company’s near-term organic growth profile, high mix of software revenue, and geographic diversity. Our positive thesis on the name is based on a collapsing multiple gap as the company proves out a track record of delivering growth through its existing customer base, new customer additions after COVID-related delays, and potentially through M&A.”
“While 2020 was challenging year to implement transformational software in hospitals, the pandemic has highlighted the need for modern tools to distribute up-to-date best practices and clinical knowledge. We expect Think to deliver organic revenue growth that should accelerate into 2021, with upside to our forecasts if pandemic pressure on hospital decision makers dissipates. We model 86-per-cent growth in 2021 to $32.6-million (24 per cent organic) and 30-per-cent organic growth in 2022 to $43.3-million. The company is expected to produce modestly positive EBITDA in 2021 as excess cash flow is reinvested into growth.”
Mr. Taylor, currently the lone analyst covering the stock, set a $5.50 per share target.
THINK RESEARCH CORP
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