[ACCESSWIRE]
NEW YORK, NY / ACCESSWIRE / February 23, 2015 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has initiated coverage of SITO Mobile Ltd. (OTCBB: SITO) with Price Target of $0.74.
"We see several potential catalysts ahead for SITO Mobile in fiscal 2015E, including the continued growth of its geo-fencing mobile advertising solutions, an announced acquisition that should more than double the company’s revenue base, and a strong push to extract value from its deep trove of intellectual property," stated Ajay Tandon, CEO of SeeThruEquity. "We are initiating coverage with a 12-month price target of $0.74 per share."
SITO Mobile is a leading mobile engagement platform provider based in Jersey City, NJ, whose messaging and location-based advertising products are used by major consumer brands and retailers in the US to interact with their customers via mobile communications. We view SITO Mobile as an intriguing growth investment targeting the large and rapidly growing market for mobile marketing and advertising. SITO Mobile has made tremendous progress since new CEO Jerry Hug took charge of the company. Revenue growth has accelerated, SITO solidified its balance sheet through a strategic financing, and the company successfully integrated its first major acquisition, DoubleVision Networks, Inc.
The report is available here: SITO Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will also be available on these platforms. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Additional highlights from the report are as follows:
Huge opportunity in mobile marketing and advertising market
SITO is targeting the large and rapidly growing market for mobile marketing and advertising. According to research outfit eMarketer, advertisers will spend over $160Bn on digital advertising in 2015E, up from $140Bn in 2014, with the growth catalyst coming from an accelerating use of mobile advertising in advertising budgets. Mobile advertising is expected to reach $32.7Bn in 2014, up 84.7% from 2013 levels. We see SITO Mobile’s location-based technology platform, which utilizes geo-fencing to target customers within a certain radius of a location and programmatic algorithms to push incentives, coupons, and other marketing messages to mobile applications in real time, as operating in the sweet spot of this fast-growing market.
Potential acquisition of Hipcricket positions SITO Mobile as a leader
On January 21, 2015, SITO announced that it has agreed to acquire financially distressed rival Hipricket. This acquisition appears to be well matched for SITO, as Hipcricket specializes in mobile engagement solutions and marketing analytics, complementary areas to the SITO core business. Hipcricket reported fiscal 2014 revenues of $26.7mn and had guided for year-over-year growth in fiscal 2015 before filing for Chapter 11 Bankruptcy protection. Assuming the merger is approved, we expect the scale of the combined company to position SITO Mobile as one of the largest pure play, publicly listed companies focused on mobile marketing and advertising. In addition to a nice existing revenue base, Hipcricket will also bring an attractive patent portfolio with over 25 patents, as well as a customer list that has less than 5% overlap with SITO – the combined company should have customer relationships with 38 of the Fortune 100.
Initiate coverage with a price target of $0.74
Our analysis of SITO indicates a fair value estimate of $0.74 per share (detailed on pages 8 - 9), implying an upside of 105.6% from the recent price of $0.36 on February 13, 2015. We view SITO as a compelling speculative growth story in the accelerating market for mobile marketing and advertising. The company recently shored its balance sheet with a strategic financing from Fortress Credit Co., LLC, and appears to be gaining traction with its new location-based mobile advertising solution. With the scale and possible synergies from the pending Hipcricket acquisition, we see significant potential for SITO.
About SITO Mobile Ltd.
SITO Mobile provides a mobile engagement platform that enables brands to increase awareness, loyalty, and ultimately sales. For more information visit http://www.sitomobile.com.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
[email protected]
SOURCE: SeeThruEquity
