5 Reasons to Buy Orbcomm (ORBC) Following Falcon 9 Launch - Canaccord Genuity
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Canaccord Genuity analyst, Michael Walkley, believes the recent Falcon 9 launch is the trigger for 5 reasons to buy shares of ORBCOMM (NASDAQ: ORBC)
1) ORBC should ramp its M2M solutions sales based on recent wins with leading customers including a leading U.S. retailer, the Hub Group, Doosan, Ryder, and several reefer trucking companies.
2) The complete OG2 satellite network should drive higher network services revenue in 2016 and beyond.
3) The recent WAM acquisition and CIMC partnership will drive new growth opportunities.
4) AIS sales should now ramp with the final OG2 launch and drive strong incremental EBIDTA growth
5) ORBC’s recent partnership with CIMC (China International Marine Company) could result in a very strong longterm growth opportunity to provide OEM solutions directly into newly manufactured dry shipping containers to the world’s leading manufacturer
SpaceX’s upgraded Falcon 9 launch vehicle successfully launched 11 encapsulated OG2 satellites from the Cape Canaveral rocket launch facility on the evening of December 21st. With ORBCOMM’s OG2 satellite network combined with its Inmarsat partnerships, the company’s improved network coverage and increased network bandwidth enhance its end-to-end solutions offering and position ORBCOMM to build on its M2M solutions deal momentum. The successful launch provides a long term runway for new and expanded deals.
These trends should drive strong profit growth going forward and could provide upside to sales and profit expectations. No change to BUY rating and $11 Price Target.
Shares of ORBCOMM closed at $6.72 yesterday.
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