Canaccord Genuity (TSX:CF, LSE:CF) has lowered its price target for Q4 Inc (TSX:QFOR) and revised its revenue forecast following the company’s fourth-quarter results on Wednesday.
Despite its strong competitive position and product leadership, the investment bank also maintained its ‘hold’ rating on the shares.
“Given the challenging capital markets backdrop and a considerable gap to close to achieve profitability, we continue to wait for better visibility on both to get more constructive with QFOR shares,” Canaccord said in a note to clients.
“Until that point, we believe depressed EV/sales multiples are likely to persist despite the company’s strong competitive positioning and product leadership.”
Revenue miss
Q4, which specializes in digital IR tools and investor websites, reported revenue of $14.2 million in the fourth quarter, below Canaccord’s estimate of $14.9 million and the street’s target of $14.8 million.
The underlying (EBITDA) loss for the quarter was -$4.5 million, which was actually slightly better than the investment bank’s call of -$5.4 million and the Street’s forecast of -$5.1 million.
Looking ahead, Canaccord tweaked down its 2023 revenue target by $3.1 million to $62 million and expects Q4 to make an $8.2 million underlying loss. For 2024 the group then moves to a modest profit.
Price target cut
Canaccord cut its discounted cash flow valuation of the business to $2.75 a share from $3.25.
The stock, which has been below $2 since the float, is currently changing hands for $2.49. That’s some way down on its $12 2021 IPO price.