Brean Capital Reiterates Buy on ARC Group Worldwide (ARCW) Following 4Q Report
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Brean Capital reiterated a Buy rating and $7.00 price target on ARC Group Worldwide (NASDAQ: ARCW) following the company's 4Q earnings report. ARCW reported revenue and EBITDA of $27.8M and $3.4M compared to the Street's estimates of $27.2M and $3.5M.
Analyst Ananda Baruah commented, "We believe ARCW is positioned to grow revenue from here with EBITDA to nicely follow beginning in the Dec Q. We believe organic revenue growth of 20%+ in 2H16 (with potential for ~10% to follow in '17), a $20M EBITDA '17 run-rate and material delivering can alter the stock's perception. Additionally (and importantly), the potential for 3D metal printing revenue is beginning to sprout. We believe ARCW currently has 13 metals printers installed, and will continue to add at least 10 annually for the next 4 years (with an oppty to add up to 20 annually); We believe each of these could add $500k - $750k in annual revenue, with EBITDA margins reaching 30% - 40% by 2020, adding an incremental $30M + and EBITDA of $11M. At 10x EBITDA and assuming just 10% EBITDA growth in the core MIM biz, ARCW's normalized EBITDA of $37M - $40M would translate into a market cap of $370M - $400M."
Shares of ARC Group Worldwide closed at $3.03 yesterday.
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