UPDATE: Maxim Group Starts Research Solutions Inc. (RSSS) at Buy, $6 PT

June 18, 2021 7:31 AM EDT
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Price: $2.62 --0%

Rating Summary:
    2 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 17 | New: 40
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(Updated - June 18, 2021 8:35 AM EDT)

Maxim Group analyst Allen Klee initiates coverage on Research Solutions Inc. (NASDAQ: RSSS) with a Buy rating and a price target of $6.00.

  • We expect demand for RSSS' research document retrieval offering to come from providing cost and time savings.
  • Growth in the annual subscription (SaaS) Platform segment (gross margins of ~80% are ~4x higher than the rest of the business) is a key focus.
  • RSSS has a strong competitive position in an $11B TAM. Positives include sticky customers, cost controls, positive FCF and a debt free balance sheet.
  • We project margin expansion due to mix shifts and high operating leverage after initial growth investments; we expect newly-appointed interim CEO and President Roy Olivier to take additional actions to spur further growth.
  • Shares trade at an EV/revenue multiple of 1.6x based on our CY22E revenue. Our $6 PT is based on 4.5x our CY22E revenue, a slight discount to peers.

For an analyst ratings summary and ratings history on Research Solutions Inc. click here. For more ratings news on Research Solutions Inc. click here.

Shares of Research Solutions Inc. closed at $2.40 yesterday.

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