Analyst: SilverSun Technologies on Track For 10% Revenue Growth, 66% EPS Lift

SilverSun Technologies Inc SSNT has impressed an analyst at WestPark Capital with a "robust" pipeline and market share opportunity.

The Analyst

WestPark Capital analyst Ishfaque Faruk initiated coverage of SilverSun with an Outperform rating and $7 price target.

The Thesis

The company "can gain substantial market share in the highly fragmented ERP software value-added reseller space by pursuing a roll-up strategy," Faruk said in a Wednesday note. (See the analyst's track record here.) 

SilverSun sells proprietary software, including MAPADOC, an electronic data interchange, and provides network and managed seices to SMB clients, the analyst said. 

With about 40 percent of SilverSun's revenues recur monthly, it has a "reasonably predictable" cash flow stream, Faruk said. All three business segments are seeing steady growth, he said. 

The fragmented nature of the VAR and managed services provider markets favors SilverSun's roll-up strategy, with the company already having made 13 acquisitions in the last six years, according to WestPark Capital. 

"Management is upbeat about SSNT's robust pipeline of customer orders and the master VAR program in [fiscal 2018]," Faruk said. 

For SilverSun, Faruk estimates 2018 revenue of $38 million, a 10-percent year-over-year increase, and earnings per share of 29 cents, up 66 percent.

The Price Action

Shares of SilverSun are down over 4 percent for the year.

At the time of publication, shares are up 1.50 percent at $4.06. 

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