"PROTECH HOME MEDICAL HAS HUGE UPSIDE, BEACON SECURITIES SAYS"
Cooper says PHM is benefiting from demographic tailwinds that are lifting the healthcare sector as a whole, but is also executing well and using technology to drive efficiencies.
“We believe these are excellent results and signify that the
company’s restructuring efforts are bearing fruit and it now has a
strong platform to
pursue growth opportunities – both organic and inorganic,” he says.
In a research update to clients today, Cooper maintained his “Buy” rating on PHM, but raised his one-year price target on the stock from $0.40 to $0.45, implying a return of 233 per cent at the time of publication.
Cooper thinks Protech will generate EBITDA of $10.8-million on revenue of $77.1-million in fiscal 2018. He thinks those numbers will improve to EBITDA of $14.6-million on a topline of $81.0-million the following year.
“Based on our forecast, PHM trades at under 4x – an unsustainably low multiple,” the analyst adds. “Based on its improving fundamentals, we expect this gap to narrow in the coming quarters. If not, we believe it represents a tremendous acquisition target itself. Either way, investors should benefit.