Canaccord Reiterates Rating On CloudMD After Quarterly Results

On August 25, CloudMD Software & Services (TSXV: DOC) reported their second quarter financial results. The company announced record revenues of $15.7 million, up 461% year over year. Gross profit came in at $5.55 million, up 439% and gross margin was 35.5%. The company lost $6.15 million on the bottom line, resulting in earnings per share of ($0.03.) Adjusted EBITDA meanwhile came in at ($0.72) million.

CloudMD currently has 6 analysts covering the stock with an average 12-month price target of $3.97, or an 112% upside. The street high sits at $5.00 from Stephens Inc, while the lowest comes in at $3.30. Out of the 6 analysts, 2 have strong buy ratings and 4 have buy ratings.

In Canaccord’s note to investors, they reiterated their $3.50 12-month price target and speculative buy rating saying that this quarter showed organic growth and that they expect profits in the third quarter.

CloudMD reported $15.7 million in revenue, higher than the Canaccord $15.3 million estimate and $15.0 million street estimate. Adjusted EBITDA also came in better than expected. Canaccord says that revenue benefitted from partial contributions from its Aspiria, Rx Infinity, VisionPros, and Ocdidium deals closing in the middle of the quarter.

Canaccord says that the company’s 9% sequential organic growth is notable as the company has been in roll-up mode for a long time, so it was hard to get accurate organic growth data. Canaccord adds, “The company has a strong sales pipeline of multi-year engagement opportunities, expecting two additional employers to go live in Q3.” Canaccord does believe that the company has enough cash to execute on any new M&A that comes up, as the company ended the quarter with $61 million in cash, $25 million in debt and $62 million in a credit facility.

Below you can see Canaccord’s updated third quarter, full-year 2021, and 2022 estimates. They have modified their estimates as they expect a more conservative ramp into profitability.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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