Paradigm Capital said it has added Plurilock Security Inc to the second edition of its Technology Watch List, one of six Canadian technology companies added that the broker's analysts believe offer attractive and emerging growth opportunities.
They said: "The overall technology landscape has witnessed a series of contractions after reaching peak valuations in 2021. Tightening monetary policy by central banks, supply chain disruptions from lockdowns in China and the Russia-Ukraine war have led to a sell-off in growth equities and added risk to business operations."
Share prices have consequently suffered, and the analysts added that they see the potential for increased M&A consolidation as firms struggle to raise capital publicly, while private equity firms and companies with strong balance sheets have the potential to take advantage.
READ: Plurilock Security ‘a relative bargain’ says Industrial Alliance Securities as broker initiates coverage with a ‘Buy’ rating
The analysts said they see several key themes in technology that are supportive to its watch list group of companies and should be of interest to investors with a long-term point of view.
Specifically on Plurilock, the Paradigm analysts noted that the company has a strong customer roster with compliance in place (SOC 2) to operate as a reliable and trusted third-party vendor to government and financial institutions.
"We believe the company’s customer wins are demonstrative of the effectiveness of its strategy. As software revenue scales to be a larger portion of the business it can carry higher valuations for the overall company," they concluded.
Contact the author at jon.hopkins@proactiveinvestors.com