Points International Ltd. (TSX:PTS) is a Toronto-based company that provides e-commerce and technology solutions to the loyalty program industry. Shares of Points International were up 3.39% in early afternoon trading on April 4. The stock has dropped 4.7% in 2018 thus far but its footprint in e-commerce is enticing. Is it a buy today?
Points International released its 2017 fourth quarter and full-year results on March 8. In the fourth quarter revenue climbed to $87 million compared to $82 million in the prior year and gross profit hit a record $13.1 million which represented a 10% jump from Q4 2016. For the full-year gross profit grew 8% to $47 million and adjusted EBITDA increased 9% to reach a record $13.2 million.
Points International saw solid success in its Platform Partners and Points Travel segments that encouraged leadership to project growth across the board in 2018. The company launched six new loyalty partner programs in 2017 and expects its new international partner to enter the market in the first half of 2018. For 2018, Points International projects that gross profit will increase between 10% and 20% and adjusted EBITDA is estimated to grow between 20% and 40%.
In December 2017 e-commerce accounted for almost $1.9 billion or 3.4% of all retail sales in Canada. This represents annual growth of about 4% for e-commerce from the same period in 2016. The decline of brick-and-mortar retailers like Toys “R” Us and Sears Canada demonstrate how quickly this trend is accelerating. Investors that want to bet on this growth should consider adding Points International for the long term.
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