eResearch is pleased to publish an update Equity Research Report on EQ Inc. (TSXV: EQ; OTC: CYPXF) pertaining to EQ’s recent release of its Q4/2020 and Annual financial statements.
We are maintaining our Buy rating and increasing our one-year price target to $2.60.
You can download our 13-page Update Equity Research Report by clicking on the following link: eR-EQ-UR-2021_04_19_FINAL
Company Description:
EQ Inc. enables businesses to understand, predict, and influence customer behaviour. Using unique and third-party data sets, advanced analytics, artificial intelligence and machine learning, EQ creates actionable intelligence for businesses to attract, retain, and grow customers. The Company’s proprietary SaaS platform mines insights from location and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions. EQ is one of the largest providers of location-based data in Canada with over 1 petabyte of data.
Quarterly Highlights:
- Data Revenue Increased by 95% Annually as EQ Continues to Build Upon its Data Offerings
- Data solutions revenue increased 95% annually to $2.55 million in 2020 and now accounts for 24% of the overall yearly revenue.
- In January, the Company reported more than $4 million in new commitments for data-driven marketing projects.
- Q4/2020 Revenue Up 16% as Advertisers Spend for the Holidays
- Q4/2020 revenue was $3.65 million, an increase of 16% quarter-over-quarter and up 27% compared to $2.87 million in Q4/2019, and slightly higher than our estimate of $3.50 million.
- Expect Future Acquisition to Target U.S. Market
- In Q4/2020, the U.S. accounted for less than 4% of revenue but is the largest ad market in the world. We await news of more U.S. deals and also an acquisition that could facilitate entry into the U.S. market.
- Strong Balance Sheet with Recent Financing
- In February 2021, EQ announced the closing of an equity offering for aggregate gross proceeds of $11.5 million.
Financial Analysis & Valuation:
- We reduced our 2021 Revenue estimate due to the impact of COVID-19 but left 2022E Revenue virtually unchanged
- 2021E: Revenue $14.5 million; EBITDA $0.2 million;
- 2022E: Revenue $23.2 million; EBITDA $3.0 million.
- We estimate an equal-weighted price target of $2.60 based on a DCF valuation ($2.57/share) and Revenue Multiple valuation ($2.55/share).
You can download our 13-page Update Equity Research Report by clicking on the following link: eR-EQ-UR-2021_04_19_FINAL
CHART 1: EQ – 1 Year Stock Chart
Notes: All numbers in USD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
