UPDATE: Macquarie Starts ORBCOMM (ORBC) at Outperform
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(Updated - October 31, 2016 10:51 AM EDT)
Macquarie initiated coverage on ORBCOMM (NASDAQ: ORBC) with an Outperform rating. Analyst Andrew DeGasperi sees the stock as a compelling investment.
"ORBCOMM makes a compelling investment case for shareholders interested in companies that will monetize the coming Internet of Things wave, a US$30bn market opportunity. After several acquisitions that have opened several new verticals and new partnerships/organic efforts to strengthen its network, we believe ORBCOMM’s sub growth will accelerate in the near term and drive top-line CAGR of 9% through ‘18. We value ORBC at US$11/sh or 15x 2017E EBITDA," said DeGasperi.
"Importantly, while shares are relatively in line with peers at ~12x 2017E EBITDA, we think its dominant position in satellite-based M2M, unique satellite/terrestrial hybrid network, high visibility to revenues thanks to extensive subscriber base and appetite for M&A will likely propel shares higher. Lastly, we note our rating is not a call on 3Q16 results," added the analyst.
Shares of ORBCOMM closed at $8.76 yesterday.
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