Analyst Aravinda Galappatthige of Canaccord Genuity maintained a Buy rating on VerticalScope Holdings, retaining the price target of C$6.50.
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Aravinda Galappatthige has given his Buy rating due to a combination of factors that highlight VerticalScope Holdings’ potential for future growth. Despite a year-over-year decline in revenue and adjusted EBITDA, the company managed to exceed expectations in terms of profitability, driven by effective cost management strategies. The increase in average revenue per user (ARPU) by 21% year-over-year is a positive indicator, suggesting that the company is successfully enhancing its monetization efforts.
Moreover, while the number of monthly active users (MAUs) fell short of expectations due to changes in search engine algorithms, the company experienced a rebound in October, indicating potential recovery in user engagement. Additionally, VerticalScope’s conservative leverage ratio of 1.3x net debt/EBITDA positions it well to explore new growth opportunities. These factors, combined with a favorable valuation and a target price of C$6.50, underpin the Buy rating recommendation.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FORA in relation to earlier this year.