UPDATE: Feltl And Company Initiates Coverage On Joint Corp

Feltl and Company initiated coverage on Joint Corp JYNT Friday with a Strong Buy rating and $12.45 price target.

Analyst Brent R. Rystrom felt that “The Joint is poised to further disrupt the chiropractic industry. For the past few years JYNT has been growing rapidly as it expanded its low-cost, high-return franchise model across the United States.

“As a result of expanding its capital through an IPO JYNT is now poised to pivot to a strategy that will increasingly emphasize the addition of corporate stores as well.”

Rystrom noted that “JYNT’s stores have the potential to make an exceptionally profitable and high return on investment at the store model. They have minimal build-out costs and working capital requirements are minimal given no inventories and an instant payment model that will virtually eliminate the need for receivables.”

“We anticipate that JYNT will acquire 27 and open 18 corporate store units in 2015. This will help drive revenue to $13.2mm from $7.4mm, and we see a loss of $(2.1mm) or $(0.21) per share in 2015,” according to the analyst note.

“The maturing store base and further acquisitions and new store development will lift revenue over 70 percent in 2017. Margins will start to expand markedly in 2017 and beyond, and we estimate EPS of $0.51 for the year.”

Joint Corp recently traded at $6.26, down 2.1 percent.