Analyst Actions: KVH Industries Upgraded to Buy by Chardan, Price Target Set at $20
BY MT Newswires — 6:27 AM ET 09/24/2018
06:27 AM EDT, 09/24/2018 (MT Newswires) -- KVH Industries ( KVH I) received an investment-rating upgrade Monday to buy from neutral from Chardan Capital Markets, which cited expectations for continued strong growth from the mobile-connectivity and inertial-navigation systems company's AgilePlans subscription-based, connectivity-as-a-service program.
Chardan set a price target on KVH's stock of $20 per share, well above the stock's Friday closing price of $12.30 each. The firm didn't have a specific price target on the stock immediately prior to the upgrade.
In a note to clients Monday, Chardan said it believes its new price target, which is based on a multiple of two times its 2019 revenue estimate for KVH, "is achievable as the company's success with its AgilePlans [becomes] evident in its results and as success in the autonomous vehicle market becomes more prominent over the next 12-18 months."
This comes after KVH said earlier this month that increased demand for AgilePlans "has been the driving force behind the company's unprecedented growth in VSAT unit deployments during the first six months of 2018, a timeframe when the maritime industry has been increasing its drive toward digitalization." The company noted it successfully shipped almost as many VSAT six months in the first half of 2018 as in all of 2017.
In its Monday note, Chardan said "we expect continued strong growth from the company's AgilePlans, resulting in improved margins and increased financial predictability, sustained growth from the company's Fiber-optic gyro business, upside from the company's TACNAV (tactical navigation for the military) business and potentially significant stock catalysts with potential announcements of partnerships in the autonomous vehicle market."
The firm described KVH's AgilePlans as having "revived a business that had seen diminishing growth."
Chardan noted the success of the AgilePlans has resulted in a slowing of the company's top-line growth because hardware is bundled into the subscription fee and recognized over time. However, it added, "this dynamic should start to stabilize soon and the underlying growth of the subscription base show up in an increased revenue growth rate later this year and into next." |
