Maxim Group analyst Allen Klee has reiterated their bullish stance on RSSS stock, giving a Buy rating yesterday.
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Allen Klee has given his Buy rating due to a combination of factors including the strong performance of Research Solutions’ high-margin Platforms segment, which has shown significant growth in annual recurring revenue (ARR) and gross profits. The company’s strategic initiatives, such as the introduction of new AI offerings and the acquisition of Scite, are expected to drive future growth. Furthermore, the company’s financial health is solid, with $12.0M in cash, no debt, and projections for positive free cash flow, indicating a strong capacity to support organic growth.
Additionally, the valuation of Research Solutions’ stock appears attractive, trading at an EV/revenue multiple lower than its peer group average. The company’s focus on expanding its sales force and improving sales strategies has resulted in the signing of multiple large deals, contributing to a positive outlook. Despite challenges in the Transactions segment, the overall business model remains robust, supporting the Buy rating and a 12-month price target of $6.00.
In another report released yesterday, Roth MKM also reiterated a Buy rating on the stock with a $5.00 price target.