Cnaccord Genuity analyst Michael Walkley is out with some bullish comments on Calamp (NASDAQ:CAMP), following the company’s first-ever analyst day, where management highlighted its strong growth and financial performance over the past four years. The analyst rates the stock a Buy with a $26 price target, which implies an upside of 57% from current levels.
Walkley wrote, “We were impressed with management’s longer-term strategy to build upon its strong hardware portfolio to offer an increasing mix of higher-margin recurring revenue solutions. In fact, management introduced mid-to-long-term target of 40% gross margin with 20% EBITDA margins. Management also highlighted growth drivers in its MRM, Wireless Networks, and Satellite business units to help achieve revenue growth faster than targeted industry growth rates that should contribute to the margin expansion targets. We believe these trends, combined with an anticipated low cash tax rate for the next several years, should drive significant earnings growth and cash flow generation.”
The analyst continued, “We believe CalAmp’s Wireless DataCom business is well positioned to drive strong F2016 and F2017 sales and earnings growth driven by ramping sales to Caterpillar, growing insurance telematics sales, ramping international sales, a growing product portfolio, an increasing list of new customer opportunities, and anticipated steady growth of highermargin recurring revenue sales.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Walkley has a total average return of 23.1% and a 69.8% success rate. Walkley has a -21.5% average return when recommending CAMP, and is ranked #4 out of 3428 analysts.