Bridgeline Digital Inc (NASDAQ:BLIN) has “substantial growth potential” in its eCommerce360 digital engagement offerings, Taglich Brothers said in a recent note.
The analyst group has a 'Speculative Buy' rating on Bridgeline’s stock, which is currently trading around $1.85 on the Nasdaq.
Woburn, Massachusetts-based Bridgeline is a digital engagement company that assists customers in maximizing the performance of their digital experience from websites and intranets, to online stores and marketing and promotional campaigns.
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The company’s platform integrates Web content management, eCommerce, marketing automation, site search, authenticated portals, social media management, as well as translation and Web analytics to help organizations deliver enhanced digital experiences.
“Bridgeline Digital has substantial growth potential for its eCommerce360 digital engagement offerings through its sales and marketing strategy that enables a streamlined and nearly virtual sales process via an artificial intelligence (AI) dashboard,” Taglich analysts wrote.
The customer experience management market is expected to grow 17.5% annually to approximately $27 billion by 2028, up from $7.5 billion in 2020, according to some estimates.
“BLIN’s eCommerce360 growth strategy was enhanced by acquiring Woorank and HawkSearch in FY21,” Taglich wrote. “The company anticipates it will increase spending on R&D and sales and marketing initiatives through our forecast period in order to support recurring subscription revenue growth.”
Taglich is projecting breakeven earnings per share on revenue growth of 21.2% to $19.8 million for full year 2023, driven by recurring subscription growth of 25.9% to $16.8 million.
However, the company lowered its price target on the stock from $6.50 to $4.75, citing a reduced sector valuation and higher-than-anticipated common share count that Taglish said impacted its initial 2023 sales per share forecast.
“Entering full year 2022, the company’s cash on hand of $8.9 million provides it with the ability to pay the contingent consideration owed to the principles of Woorank and HawkSearch, as well as planned increases in R&D and sales and marketing spending on initiatives that should help drive recurring subscription revenue through our forecast period,” Taglish added.
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