Oppenheimer: Quotient Technology Boasts 'Underappreciated Secular Tailwind'

Quotient Technology Inc QUOT, a provider of digital platforms that connect companies with shoppers through personalized and targeted promotions, boasts an "underappreciated secular tailwind," according to Wall Street's newest bull analyst.

The Analyst

Oppenheimer's Jason Helfstein initiated coverage of Quotient Technology's stock with an Outperform rating and $16 price target.

The Thesis

Quotient Technology operates the Retailer IQ and Quotient Media Exchange platforms and is-well positioned to take advantage of an encouraging trend over time, Helfstein said in the initiation note.

In 2016, up to 9 percent of all consumer packaged goods coupons were distributed and redeemed digitally, according to Oppenheimer. But the company does offer a "significantly more convenient" coupon that is scalable versus printed coupons, and should see tremendous growth ahead, Helfstein said. 

"In our view, the legacy digital print format has held the digital promotions industry back," the analyst said. "We believe the proliferation of digital paperless will narrow the gap in spend with general advertising and act as a secular tailwind on Quotient's top line."

A shift toward digital promotions over time could result in Retailer IQ transactions to grow at a 36-percent compounded annual growth rate through 2020, while legacy print coupons will see a 15-percent CAGR decline over the same time period, Helfstein said.

Quotient could see a total revenue CAGR of 18 percent through 2020 and EBITDA CAGR of 35 percent, according to Oppenheimer. 

Price Action

Shares of Quotient Technology were trading lower by 0.38 percent Wednesday afternoon. 

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