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"PROTECH HOME MEDICAL HAS HUGE UPSIDE, BEACON SECURITIES SAYS"

On Tuesday, Protech reported its Q3, 2018 results. The company generated EBITDA of $3.6-million on revenue of $19.7-million, a topline that was up 5.3 per cent over the same period last year.

“I am very pleased with our third quarter financial results,” CEO Greg Crawford said. “It has only been eight months since our current management team has been in place and in the short six months of reported results, we have begun to clearly demonstrate that we are capable of increasing revenues and margins while maintaining a relatively conservative balance sheet with a healthy cash position. We are starting to see the results of the implementation of our revised corporate strategy that incorporates technology, organic growth and strategic acquisitions which we believe will continue to improve our overall financial results on a go-forward basis.”


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.



  Posted by: Nick Waddell | CantechLetter.com