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Investors: Meet Maxim's Two Newest Initiations

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Maxim Group analyst Brian Kinstlinger initiated coverage of two Software and Services stocks, both with a Buy rating. The price target for Evolving Systems Inc (NASDAQ: EVOL) was set at $14, while that for Information Services Group, Inc (NYSE: III) was at $8.

Evolving Systems announced revenue growth of about 20 percent and EBITDAS growth at 50 percent, without any customer additions in 2014. Kinstlinger expects robust growth this year and the next, with two new customers moving into production with DSA during 1Q15. "As two new mobile operators went active with DSA in 1Q15, we anticipate more than 25% growth in DSA revenue in 2015 and 2016."

In a report published Thursday, Maxim Group noted, "For two years, EVOL has been in conversations about DSA with several mobile operators, but the company only received one order in 2014 (December)—down from four in 2013. Given a list of other telecom priorities, DSA has taken a backseat, however, we expect that to change over the next two years and believe EVOL will add about four customers per year in 2015 and 2016, helping sustain the accelerating top-line growth rate."

Regarding Information Services Group, Kinstlinger commented, "Given the projected $180 billion in expected IT contract awards in 2015-2016, we believe that III is positioned to post accelerated revenue growth."

While projecting 2 percent and 8.6 percent revenue growth for 2015 and 2016, respectively, the analyst believes that growth could "easily surpass" the estimates, with customers turning to the company to help them navigate contractor selection.

"We believe that III can replicate its IT sourcing model for the engineering market, which should provide an incremental growth catalyst. With its large database of global data for benchmarking, III has differentiated its services and become a leader in the IT advisory space for sourcing. However, its customers also need advisory consultants for engineering selection," Kinstlinger said.

With cloud and analytics services emerging, Information Services Group helps customers better understand the business process, explaining what can be transitioned to the cloud and then recommends the best technology. "The increasing complexity and rapidly changing technology makes this service invaluable, in our view," the report added .

Latest Ratings for EVOL

Sep 2015DA DavidsonMaintainsNeutral
Aug 2015DA DavidsonDowngradesBuyNeutral
Apr 2015Maxim GroupInitiates Coverage onBuy

View More Analyst Ratings for EVOL
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Posted-In: Maxim GroupAnalyst Color Initiation Analyst Ratings


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