CloudMD: Canaccord Reiterates $3.00 Price Target After Q3 Results
On November 29th, CloudMD Software & Services Inc. (TSXV: DOC) announced its third quarter financial results. This is the first full quarter with a number of acquisitions, bringing the company’s quarterly revenue to $39.16 million, up 150% quarter over quarter. Additionally, the company saw gross profits grow 158% to $12.21 million or a 31.2% gross margin. Adjusted EBITDA grew to $0.81 million, up from a negative $1.32 million last year. Lastly, the company reported a net loss of $4.33 million, or earnings per share of negative $0.02.
CLoudMD currently has only 6 analysts covering their stock with an average 12-month price target of C$3.83, or a 189% upside to the current stock price. Out of the 6 analysts, 2 have strong buy ratings and the other 4 have buy ratings. The street high sits at C$5.00 from Stephens Inc while the lowest price target is C$3.00 from two analysts.
In Canaccord’s third quarter review, they reiterated their C$3.00 12-month price target and speculative buy rating on CloudMD, saying that the results came in line with the companies preannounced results. For the results, Canaccord had estimates of C$36.9 million in revenue and adjusted EBITDA of C$1.0 million.
While the company beat Canaccord’s revenue estimate, they say that the company saw 11% year over year organic growth versus the 9% last quarter. Specifically, Digital Health Solutions saw 26% organic growth to $10 million, while the company’s numerous amounts of M&A contributed to the rest of the revenue growth.
During the call, the company noted that they saw the $1.5 million in annual cost saving from MindBeacon, but now the company believes there is another $2 million in potential synergies to be unlocked post-close.
Below you can see Canaccord’s updated fourth quarter, full year 2021, and 2022 estimates. They say that the updates stem from management’s updated commentary on MindBeacon.
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