Chardan Capital Markets Maintains Bullish View on Cogent (COGT) on Expected Strong Revenue Growth and Margin Expansion
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Chardan Capital Markets analyst James McIlree reiterated his Buy rating and $12.50 price target on Cogent (NASDAQ: COGT) saying the company is positioned for growth and margin expansion.
McIlree commented, "We continue to recommend purchase of Cogint with a $12.50 price target after the company posted Q3 revenue and EBITDA better than we expected. Importantly, the gross margin pressure experienced in Q3 has abated and we expect to see better gross margins in Q4 due to a rebound in the Performance Marketing segment. Over the coming years, as more revenue is generated by the company’s Information Services business, we expect a sharp increase in gross margins since there is significant operating leverage. The company expects over time to improve its overall gross margins from the current ~30% to 50%. This will result in a sharply higher EBITDA and we believe a significantly higher multiple."
Shares of Cogent closed at $3.85 yesterday.
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Related EntitiesChardan Capital Markets, James McIlree
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