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UPDATE: Brean Capital Initiates Coverage On Park City Group On Positive Outlook

In a report published Friday, Brean Capital analyst Todd Mitchell initiated coverage on Park City Group (NASDAQ: PCYG) with a Buy rating and $19.00 price target.

In the report, Brean Capital noted, “We are initiating coverage on PCYG with a Buy rating and $19 target price. Park City Group (PCYG) is a supply chain management company with an Enterprise Resource Planning (ERP) based system that aggregates data across all points of the food industry supply chain.

"Park City Group's key growth prospect is a separate business, called ReposiTrak, which helps food retailers and wholesalers aggregate supply chain data for food safety monitoring. We believe this business can grow to $98 million in F2020 from close to nothing in F2014. Park City Group does not currently own ReposiTrak. However, the two have a symbiotic relationship as ReposiTrak was built on Park City Group's technology platform, and Park City Group holds an option to purchase 75% of ReposiTrak for $500,000.

"Our target price of $19 in based on 15.0x F2020E free cash flow (FCF) of $46 million, discounted to NPV at 15.2%, and assumes that Park City Group will issue 5 million common shares of stock, for a total of 21.7 million shares, equivalent to 30% dilution, to acquire the remaining 25% interest in ReposiTrak that it does not own at the end of F2015.”

Park City Group closed on Thursday at $12.89.

Latest Ratings for PCYG

DateFirmActionFromTo
Jun 2014Brean CapitalInitiates Coverage onBuy

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Posted-In: Brean Capital Todd MitchellAnalyst Color Initiation Analyst Ratings

 

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