eResearch is pleased to publish an Update Report on EQ Inc. (TSXV:EQ). The report covers the Company’s Q2/2021 Financial Results and recent news, including the acquisition of Paymi.
We are maintaining our Buy rating and a one-year price target of $2.65.
You can download the full 14-page report by clicking here: eR-EQ-UR-Q2-2021_09_22_FINAL
Quarterly Highlights:
Quarterly Revenue Increases 71% Q/Q and 74% Y/Y
- Revenue for the three months ended June 30, 2021, was $3.0 million, an increase of 74% compared to $1.7 million in Q2/2020, and slightly higher than our estimate of $2.98 million.
- EQ’s Data Solutions revenue, its fastest-growing segment, increased 85% from Q2/2020 to $0.8 million in Q2/2021, and accounted for 27% of the overall quarterly revenue.
- Paymi Acquisition Opens New Consumer Line of Business and Proprietary Data Set
- Paymi is a cloud-based rewards and marketing platform that processes consumer transactions in real-time to create aggregated, anonymized customer spending profiles. Paymi adds a new consumer line of business that should generate incremental revenue & also provides a new proprietary data set to the LOCUS platform.
- Recent Sales Wins Support Stronger H2/2021
- In June, EQ reported that it entered into a data services contract with one of Canada’s largest media companies to utilize the LOCUS platform and it also signed a $1.8 million agreement with an unnamed media agency to use the LOCUS data platform to provide data solutions and insights to leverage online and offline audiences.
Financial Analysis & Valuation:
- We slightly reduced our 2021 and 2022 revenue estimates due to the continued impact of COVID-19 on advertising spending.
- 2021E: Revenue $13.1 million; EBITDA loss of $0.9 million;
- 2022E: Revenue $22.2 million; EBITDA $2.9 million.
- We estimate an equal-weighted price target of $2.65 based on a DCF valuation ($2.49/share) and Revenue Multiple valuation ($2.86/share).
We are maintaining our Buy rating and a one-year price target of $2.65.
You can download the full 14-page report by clicking here: eR-EQ-UR-Q2-2021_09_22_FINAL
FIGURE 1: EQ 1-Year Stock Chart
Notes: All numbers in CAD 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.
