FSV - FirstService raised to Outperform at BMO as recurring revenue offsets weak macro
2023-06-30 10:21:14 ET
BMO Capital Markets analyst Stephen MacLeod upgraded FirstService ( NASDAQ: FSV ) stock to Outperform from Market Perform on Friday due to favorable long-term growth prospects.
Shares climbed 3.3% in early trading, bringing its year-to-date gains to 26.7%.
MacLeod pointed to a number of organic growth drivers: "1) competitive takeovers (~50% of organic growth); 2) new development wins (75% of new homes are built in managed communities; ~20% of growth); 3) pricing, expanding services, conversions (~30%)."
Also, the real estate services firm's 75%-80% recurring revenue could enable it to weather a weaker macroeconomic backdrop, he pointed out in a note.
That said, the sell-side analyst reckons the company should be able to generate annual 10% revenue and EBITDA growth for decades.
The Outperform rate aligns with the average Wall Street analyst rating of Buy.
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FirstService raised to Outperform at BMO as recurring revenue offsets weak macro