UPDATE: Macquarie Starts CalAmp Corp. (CAMP) at Neutral
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(Updated - October 31, 2016 10:46 AM EDT)
Macquarie initiated coverage on CalAmp Corp. (NASDAQ: CAMP) with a Neutral rating with a price target of $14.
Analyst Andrew DeGasperi said, "There is sizeable interest among investors to participate in the explosive growth associated with the Internet of Things and its potential to improve productivity across enterprises globally - A Total Addressable Market that Cisco has pegged at US$30bn. CalAmp will likely benefit from these trends thanks to an extensive car dealer/licensee network and growing OEM relationships, a focus on growing SaaS and subscription revenues as well as an unlevered balance sheet, that can unlock M&A to bring new distribution channels and geographies to bear."
The analyst added, "That said, we remain cautions for now: 1) several end markets that benefit from its telematics product in N. America are under pressure and we think it’s too early to call this a blip; 2) there is low visibility to future revenues, given only 15-20% is subscription-based; and 3) while CAMP shares look attractive at 9x CY17E EBITDA, they may be out of favor until business investment in N. America returns. Our US$14 target price is based on 10x CY17E EBITDA."
Shares of CalAmp Corp. closed at $12.83 yesterday.
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