Mindbody (MB) PT Raised to $25 at Imperial Capital
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Imperial Capital analyst George Kelly reiterated an Outperform rating and lifted his price target on Mindbody (NASDAQ: MB) to $25.00 (from $22.00).
Quarterly overview. On 10/26/16, MB reported revenue and EBITDA of $35.3mn and ($1.1mn), respectively, versus our estimates of $35.0mn and ($2.0mn). The quarter benefitted from lower opex levels and the acquisition of HealCode in early September. A detailed quarterly review is provided in Figure 3.
Operating metrics. MINDBODY exhibited strong operating metrics across the subscription and payments businesses. Subscribers grew 2.8K sequentially, the highest growth of 2016, and ARPS grew $2 sequentially and $22 year-over-year (yoy) to $204. Payments revenue grew 41% from a higher take rate and higher per-sub volume.
Focus on profitability. MB’s subscription profitability appears to be improving. Estimated core subscription (excluding API) gross profit margin has grown substantially in recent quarters, and incremental EBITDA margins have also ramped this year despite flattening high margin API revenue.
Shares of Mindbody closed at $20.20 yesterday.
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Related EntitiesDefinitive Agreement, Imperial Capital
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