VerticalScope Holdings, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Aravinda Galappatthige from Canaccord Genuity maintained a Buy rating on the stock and has a C$6.00 price target.
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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’s performance slightly exceeded expectations, indicating resilience in a challenging market environment. The decline in revenue was primarily due to a decrease in monthly active users, influenced by changes in Google’s search algorithm, but this was partially offset by a significant increase in average revenue per user (ARPU).
Moreover, VerticalScope’s eCommerce revenue showed a notable year-over-year increase, supported by a rise in ARPU. The company’s balance sheet remains solid with a conservative leverage ratio, allowing management to explore strategic acquisitions and initiatives to enhance shareholder value. These factors, combined with a valuation based on a 5x EV/EBITDA multiple for 2026, underpin the Buy rating, suggesting potential upside for investors.