Imperial Capital Remains Sidelined as Control4 (CTRL) Reports In-Line 4Q Results
Imperial Capital reiterated an In-Line rating on Control4 Corporation (NASDAQ: CTRL), and raised the price target to $8.50 (from $7.50), following the company's 4Q earnings report. Control4 reported revenue of $42.9mn, up 4% year-over-year, consistent with the consensus estimate of $43mn. Adjusted EBITDA of $4mn was also consistent consensus estimates. Adjusted EPS of $0.07 was consistent with consensus estimates.
Analyst Jeff Kessler commented, "We are maintaining our In-Line rating on CTRL shares and increasing our one-year price target to $8.50 from $7.50, about 5% above the recent share price. Based on our conversations with investors, we believe that some may be frustrated with the largely hardware strategy (software model could be better monetized in the next 4 to 5 years), which appears to be negatively impacting Control4’s core revenue growth rate. In our view, the shares are likely to experience headwinds over the next 12 months while the company works to better differentiate its products and create a competitive moat. However, we believe the recent acquisition of Pakedge should give Control4 access to a larger customer base, increase the frequency of product sales (Pakedge products comes with a much shorter sale cycle), and immediately grow the top line by roughly 13% (or $18.5mn sales generated by Pakedge in FY15)."
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Shares of Control4 Corporation closed at $8.08 yesterday.