QMCI - QuoteMedia Inc. (QMCI) - Gaining Revenue Traction

Mixed Q4 results. Total company revenues increased a solid 20% to $3.9 million, slightly lighter than the $4.0 million we were looking for. The variance was attributable to slower than expected growth at its Corporate Quotestream business, which increased revenues 20.8%, below our 39.5% growth rate. Adj. EBITDA was better than expected at $555,000, versus our $501,000 estimate, largely due to lower than expected SG&A costs.Promising revenue outlook. The latest quarter results reflected a sequential decline in the rate of revenue growth, 19.9%, versus Q3 growth of 21.7% and Q2 revenue growth of 26.5%. However, management indicated that it has signed contracts with several large customers, providing compelling revenue visibility into 2023.Better than expected outlook. QuoteMedia entered into preliminary agreements to provide services to two large international financial firms. With large contracts in the works and the likelihood of the information security certification during the year, management is optimistic to achieve revenue growth in 2022 similar to the 22% growth rate achieved in 2021, which is above our 16% growth estimate. Revising 2022 estimates. We are raising our estimates for the full fiscal year 2022 to $18.56 million, up 5.1% from our previous $17.66 million estimate. Additionally, we expect 2022 adj. EBITDA to be $2.875 million up from our previous forecast of $2.186 million. We are posting favorable revenue and adj. EBITDA growth for full year 2023 as well.Raising price target. Near current levels, QMCI shares trade at a modest 6.2 times enterprise value to our 2023 EBITDA estimate, at the low end of its historic trading ranges and well below the expected growth rate. Based on the upwardly revised estimates, we are raising the price target from $0.25 to $0.35 and rate the shares Outperform. Read More >>