Lake Street Capital Markets on Wednesday issued a company note on SeaChange International SEAC after analysis of the company's expanding consumer pipeline. The firm initiated coverage of SeaChange with a Buy rating and $7.50 price target.
Analyst Jaeson Schmidt wrote, "We think SeaChange should be able to emerge as one of the "winners" from the growing over the-top (OTT) video market...We believe SeaChange's customer engagement pipeline remains strong and growing across its entire solutions portfolio, which should provide a long runway for growth."
Analysts at Lake Street gave two key reasons why they see strength in SeaChange International:
1. Margin expansion
Lake Street believes that SeaChange has the potential to drive margin growth due to a favorable product mix, economies of scale and strong product demand. This combined with a largely recurring revenue base may drive earnings in the near term.
2. Growing customer pipeline
Analysts noted that SeaChange excels with customer engagement, which has allowed it to develop a robust customer base with strong product demand. Going forward, SeaChange has initiatives such as Nucleus at Liberty Global which have the potential to drive growth in market share.
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