We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Canaccord reiterates 'buy' rating on Quixant following 'encouraging progress'

Wed 22 September 2021 12:53 | A A A

No recommendation

No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

(Sharecast News) - Analysts at Canaccord Genuity reiterated their 225.0p target price on technology outfit Quixant on Wednesday, citing some "encouraging progress" despite margin headwinds.

Canaccord said Quixant's interims, with a 31% jump in first-half group revenue to $36.5m, represented 52% of its full-year revenue expectation for a "typically H2 weighted" business.

The Canadian bank also stated it demonstrates a "buoyant recovery" in gaming and the strategic focus on human machine interaction for broadcast at Densitron.

"To this point, the strength of the gaming proposition helped secure five new business wins in H1 (including a self-serve betting terminal project with BetConstruct taking new wins over the last 15 months to 11) while a first lease agreement was launched in H2 with a long-term Gaming client," said Canaccord, which also added there were 61 broadcast customers in final stage approval within the Densitron pipeline.

As a result, Canaccord said order intake provided 115% order coverage against full-year management revenue expectations alongside improved visibility into 2022 to provide encouragement on the outlook.

However, Canaccord added that while management also anticipates adjusted pre-tax profits in line with its expectations, supply chain headwinds had temporarily compressed first-half gross margins to 30% despite strategic actions on inventory mitigating the impact, with the trend also likely to continue into 2022.

"As a result, while we upgrade our revenue expectations by 15% (FY21E) and 10% (FY22E) we are lowering our gross margin estimates which in turn drive our adj. PBT and therefore EPS estimates down by 13% and 15%, respectively," said Canaccord.

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.


    More stockbroker tips from ShareCast

    Latest economy and stock market articles