Openn Negotiation Ltd (ASX:OPN) has attracted a Speculative Buy recommendation from Euroz Hartleys and an improved price target of 40 cents per share, up from $0.35, ahead of its commercial launch in North America in the second half of this year.
The Australian property technology company, which offers a proprietary cloud-based software platform to support real estate agents to sell property online, is focusing on growing industry relationships and formalising partnerships with existing channels to market in key regions across Canada and the USA.
Presently, shares are trading at $0.20 with a market cap of $30.77 million.
The key catalysts behind the price upgrade are:
- North American commercial launch due 2H’22;
- Launch of Openn Tenders; and
- Q’3 Australian market upload data.
The following are the key points from the Euroz Hartleys report:
Impact
- Our investment case remains unchanged;
- OPN takes 5% of the Australian real-estate transaction market by FY’24. Current upload growth rate is supportive with growing market penetration on East Coast;
- Supportive partners backed by the National Association of Realtors and growing push for transparent and accountable real-estate transaction in the North American market opens doors to multiple listing services (MLS), technology providers and brokerages;
- Experience in the Australian market is ultimately transferred to entrance in North American markets, where market structure enables rapid scale with reduced friction to take upmarket; and
- Long term, transaction data is monetised for sale in North American and Australian markets.
In previous research, we have reviewed the concept of the MLS in North America as a potential go-to-market strategy.
With OPN now outlining potential software as a service (SAAS) pricing models for MLS partnerships, in our view company is nearing a commercial outcome in North America.
Action
We have made some adjustments to our forecasts, and as a result, our Price Target is $0.40/sh.
Market capitalisations beyond this, potentially magnitudes, are plausible with the reasonable take-up of the platform in the North American Market and eventual monetisation transaction data.