UPDATE: D.A. Davidson Initiates Coverage on Mistras Group with Neutral Rating, $23 PT on Impressive Growth, Compelling Prospects

In a report published Thursday, D.A. Davidson analyst Tristan Richardson initiated coverage on Mistras Group

with a Neutral rating and $23.00 price target. In the report, D.A. Davidson noted, “The company has delivered substantial growth since its IPO in 2009, driven by a mix of organic and acquired contributions. Due to the low leverage operating model, revenue growth tends to support earnings growth. We would note recent results have been negatively impacted by the mix of products and services. We look for continued revenue growth and only modest margin improvements as we expect Service segment margin expansion to be offset by lower margins in International. We are initiating coverage on the shares of Mistras with a NEUTRAL rating. The recent growth has been impressive and growth prospects appear compelling, given the opportunities for market share gains and further acquisitions. The shares appear to discount current growth prospects and only offer modest appreciation potential to our initial price target of $23.” Mistras Group closed on Wednesday at $21.65.