Roth Capital Maintains a Buy Rating on Top Image Systems
By Corrie Williams
In a report released today, Richard Baldry from Roth Capital maintained a Buy rating on Top Image Systems (NASDAQ: TISA), with a price target of $7.50. The company’s shares opened today at $3.35.
Baldry wrote, “After the close yesterday, Lexmark (LXK-NR) announced an agreement to buy Kofax (KFX-NR), a competitor in TISA’s image and data capture space. With an indicated enterprise value of roughly $1 billion (or roughly 3.1x run-rate revenues), we believe the consideration and timing highlights the increasing importance of TISA’s addressed market. With TISA’s shares trading at a significant discount to the deal valuation, we remain bullish about its outlook and as such we reiterate our Buy rating and $7.50 target price. Competitor to be acquired at significant premium valuation. Lexmark’s announced deal to acquire Kofax is structured as an all-cash deal for $11.00 per share, a premium of 47% to KFX’s closing price yesterday (or 17% above its June 2014 record high of $9.40). The roughly $1 billion enterprise value equates to roughly 3.1x KFX’s 2QF15 run-rate revenues (net of cash). For a moderate growth company (1HF15 revenues increased 6% yr/yr), we view the acquisition consideration as fair”
Top Image Systems has an analyst consensus of Strong Buy, with a price target consensus of $6.50.
Based on Top Image Systems` latest earnings report from September 30, the company posted quarterly revenue of $10.7M and quarterly net profit of -$4.77M. In comparison, last year the company earned revenue of $8.03M and had a net profit of -$76k.
According to TipRanks.com, Baldry is a 4-star analyst with an average return of 12.0% and a 75.6% success rate. Baldry covers the Technology sector, focusing on stocks such as Sapiens International Corporation, Concur Technologies, and Callidus Software.
Top Image Systems Ltd develops & markets automated data capture solutions for managing and validating content gathered from customers, trading partners and employees. The Company’s products include Enterprise Content Management (ECM) & banking solutions.
