Leede Jones Gable analysts initiated coverage on shares of Plurilock Security Inc with a ‘Buy’ recommendation and a $1 per share target price, saying the company’s vision is to deliver solutions that combine next-generation identity technologies with best-of-breed cybersecurity tools.
“Plurilock’s sales model combines the resale of the third-party products with upselling/cross sales of high-margin services and Plurilock’s own high-margin recurring revenue products,” the analysts wrote.
They also noted that the company is actively pursuing strategic acquisitions, which Plurilock’s management believes will allow it to offer a broader suite of products that will enhance its ability to be a “single-provider solution” as this is what many customers are looking for.
READ: Plurilock sees revenue continue to climb following Aurora Systems acquisition
The Leede Jones Gable analysts added that Plurilock has strengthened its financial position with a recent bought deal public offering, forecasting that the company will have a cash position of about C$5 million at the end of 2021.
“We are currently valuing Plurilock using a 1.2 times multiple to our full year 2023 revenue estimate. We believe that this multiple is fair as the company currently generates the majority of its revenue for the Solutions Division, which is primarily a value-added reseller of cyber security products,” the analysts wrote.
“However, Plurilock is focused on upselling and cross selling of its high-margin products and services to its existing client and if the company is successful with this initiative, it will have a material impact on revenue and margins. Once this happens, we believe that a multiple expansion would be warranted.”
Contact Sean at sean@proactiveinvestors.com