UPDATE: Ladenburg Thalmann Downgrades IZEA, Inc (IZEA) to Sell, 'Current Valuation Well Above Current Fundamentals'
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Ladenburg Thalmann analyst Jon Hickman downgraded IZEA, Inc (NASDAQ: IZEA) from Neutral to Sell, PT $3
The analyst comments ": Though we anticipate a sequential uptick in Q4 2020 revenues and rather robust growth into 2022, the current market valuation ($378 million) seems excessive especially given that 1) the company is unlikely to be operationally profitable until late this year and 2) the majority of the revenues remain with the lower margin Managed Service segment. Given our revenue growth expectations through 2022 along with the SaaS nature of the software segment, we feel an appropriate revenue multiple would be 5x. As such, we are now basing our valuation on a 5x multiple on the 2022 revenue estimate of $33.5 million, discounted back to the present at 20%. This calculation equates to a value of roughly $2.50. Additionally, we are adding $0.50 per share to account for the cash balance. As such, we are increasing our estimate of fair value (and target price) to $3.00 and revising our investment rating to Sell due to the current share price."
Shares of IZEA, Inc closed at $6.79 yesterday.
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