WeCommerce: TD, Canaccord Raise Price Targets After Leading Bought Deal

Last week, WeCommerce (TSXV: WE) announced that their bought deal closed. The company issued 2.81 million shares at a price of $12.00 for gross proceeds of $33.7 million. The company said they would be using the proceeds “for strategic acquisitions and for working capital and general corporate purposes.”

On the back of the deal closing, both lead underwriters, TD, and Canaccord, increased their 12-month price target on the company, bringing the weighted 12-month price target to C$21.50. These are the only two analysts covering the name, with TD having a C$23 price target and buy rating while Canaccord has a C$20 price target and buy rating.

In Canaccord’s note, their analyst says that WeCommerce is now recharged for more M&A and that the funds, “provides WeCommerce ammo to chase an active deal pipeline with the potential to add more than $100M in revenue.” They believe that WeCommerce will look for smaller $10 – $50 million targets instead of larger +$100m deals and emphasize a likely focus on apps.

To add to this point, Canaccord says that the management team mentioned that they remain in multiple ongoing conversations with potential deals. Recently, the company has expanded its team that manages potential acquisitions. They add, “We expect some distraction from the current CFO search and integration efforts related to Stamped under new CEO Andrew Dumont.”

Canaccord expects that Stamped will add $4.2 million in its first full quarter of revenue, bringing WeCommerce’s total revenue to $10.2 million with a $4 million / 39% EBITDA margin for the second quarter.

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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