Mobile networking software and services company Pareteum (TEUM) will meet analysts and investors at the Craig-Hallum Institutional Investor Conference in Minnesota next week, May 28. In addition to presentations from management, Pareteum will have customers from its three main segments, CSP, IoT and enterprise.
Northland analyst Michael Latimore views next week’s event as “another sign of the further and rapid maturation of the company.” Latimore believes Pareteum has “a unique opportunity to be the cloud-based business and operations support system for agile mobile service providers.”
Pareteum released earnings in early May and reported revenue growth of more than 400%, while EPS rose more than 17x. That prompted Craig-Hallum’s Greg Sutton to reiterate his Buy rating on Pareteum stock with an $8 price target. (To watch Sutton’s rating, click here)
Pareteum stock is one of 2019’s best performers, as shares have rose nearly 200% year-to-date. But Sutton doesn’t see the company slowing, as he says Pareteum will be able to grow “at breakneck speed for a reasonable duration…[with significant] stock opportunities.”
Sutton points out that Paretum is creating “a massive number of connections between consumers, IoT devices, etc.,” and has a massive market opportunity. While the analyst sees this space as getting more competitive eventually, including Twilio with its programmable wireless offering, he doesn’t believe they have been in any sales cycles yet, which should pave a path for Pareteum to continue growing.
Sutton views Pareteum’s recent report as strong, with “backlog growth and connection growth [remaining] significant.” The analyst is “quite enamored by the meaningful growth,” of the company’s 36-month backlog, as it has actually outpaced guidance and results; in the first quarter, backlog ended up 369%, closing at $938 million.
As backlog continues to grow rapidly, Sutton says “conversion [is] an important driver.” While there was some concern about conversion in the past, Sutton believes that “the backlog conversion process improved relative to the implementation,” with it being “clear that customers deployed were adding connections at a faster than expected rate.”
Furthermore, Sutton believes the company’s “growth rates are so outstanding” because Pareteum is using “its open-architecture platform with its Super API’s as the ideal place to meet the market needs,” which has until not gone unmet.
All in all, TipRanks’ data shows an overwhelmingly bullish camp backing Pareteum. The ‘Strong Buy’ stock has amassed 5 ‘buy’ ratings in the last three months, with no ‘hold’ or ‘sell’ ratings. The 12-month average price target stands tall at $8.00, marking nearly 63% in return potential for the stock.
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