In a research report issued today, Canaccord analyst Michael Walkley reiterated a Buy rating on shares of CalAmp Corp. (NASDAQ:CAMP), with a $26 price target, after the company announced a bid to acquire LoJack for $113 million or $5.50 a share in cash. In addition, the company announced preliminary Q3/F16 results that were slightly above Canaccord’s estimates and reiterated F2016 revenue guidance consistent the firm’s estimates
Walkley wrote, “We believe an acquisition of LoJack meets all four of management’s acquisition criteria of gross margin accretion, non-GAAP earnings accretion, vertical market alignment, and ease of integration. In fact, we believe LoJack has strong channel and product synergies, particularly for CalAmp’s recent SmartDriversClub investment, Crashboxx acquisition, and ongoing OB2 investments. With LoJack’s strong dealer relationships and brand, the combined companies could offer telematics solutions with access to integrated offerings ranging from dealer operational efficiency, vehicle security and monitoring, vehicle safety, maintenance and service, automotive insurance, and more.”
The analyst concluded, “We believe CalAmp’s Wireless DataCom business is well positioned to drive strong F2016 and F2017 sales and earnings growth through 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 higher-margin 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 17% and a 63.7% success rate. Walkley has a 4.3% average return when recommending CAMP, and is ranked #11 out of 3638 analysts.
All the 4 analysts polled by TipRanks rate Calamp stock a Buy. With a return potential of 26.2%, the stock’s consensus target price stands at $25.75.