There were lots of impressive metrics in the latest update from blur (LON:BLUR), but equally illuminating is the number of brokers now covering the company.
Panmure Gordon is the latest City firm to add the crowd-sourcing specialist to its coverage universe, kicking off with a ‘buy’ recommendation and a 677p price target.
The company is an undoubted stock market star and Panmure Gordon’s George O’Connor even suggests founder and chief executive Philip Letts has “rock star qualities”, but the broker has tried to ignore all the hoop-la, and look under the hood at what makes blur tick.
What it found is a project management tool on a business services exchange that carves out supply chain efficiencies delivering savings of around 20-25%.
If crowd-sourcing is the new rock & roll, then blur is “not a one-hit wonder”, the broker suggests.
“blur, the AIM Britpopstar, is revolutionising B2B [business-to-business] services procurement and is fast becoming the ‘Amazon of services commerce’,” the broker claimed, adding that the company’s third quarter metrics were ahead of its initial expectations.
Panmure Gordon’s 677p price target is “a blended target” and “very much a compromise” to its discounted cash flow valuation of 1,301p a share.
Other brokers were similarly enthused by blur’s progress.
Liberum Capital, for whom a ‘buy’ recommendation is not enough – the rating is ‘strong buy’ - said the update reveals very strong momentum in all areas of the business.
“While the number of projects submitted and completed are running ahead of expectations, the major upside in the quarter came from average project value submitted which rose sharply to $28.8K in the quarter, from $22.9K in Q2’13.
This reflects the rising adoption of the exchange by larger businesses resulting in higher value projects being submitted,” Liberum said.
The broker is pondering whether its revenue forecast of US$9.4mln for the current year is now optimistic enough.
Shore Capital also seems to have been caught on the hop by blur’s astounding progress, and it is set to revise upwards its revenue expectations for the current year and beyond.
“We believe that the projects submitted figure is likely to pull through an acceleration in projects completed for the current quarter – driving the materiality of our upgrade. The increase in the average submitted project value to $29k from $13k is a less important figure than project volumes to our minds. This figure is set to remain volatile and is still dominated by just a few larger projects – we believe that this figure is set to ameliorate over time as the platform grows and matures,” Shore’s Robin Speakman said.
As blur’s house broker, N+1 Singer was less surprised by the metrics, which it said underpin its expectations of accelerating growth. It focuses on the market opportunity for blur.
“The opportunity is large, as the group’s Exchange can address a significant part of the c.US$2tn global corporate services market and it has built a first mover advantage. The shares have performed very well but in the context of the global opportunity, continued strong execution should create further shareholder value,” the broker believes.