Chardan Analyst Believe iPass' Turnaround Strategy Is Working

iPass Inc. IPAS reported its 2Q revenue ahead of expectations. Chardan Capital Markets’ James McIlree upgraded the rating on iPass to Buy, with a price target of $2, saying that the company’s turnaround strategy seemed to be working.

iPass reported its 2Q revenue at $16.5 million, well above Chardan’s estimate of $15.1 million. This represented the first y/y and q/q growth in several years. Enterprise user count came in at 83,000, in-line with expectations. Users from strategic partnerships was 42,000, significantly beating the 29,000 estimate.

Strategy Working

The growth in enterprise revenue and users, despite higher churn, highlights the strength in the company’s core business as well as the effectiveness of the Unlimited Plan, analyst James McIlree pointed out. He added that iPass had inked several partnerships globally, and the core business seemed poised to continue growing.

“We have been waiting for positive signs the company’s new strategy would lead to revenue growth, preferring to be late on the turnaround, and we believe the new strategy is working,” McIlree wrote.

iPass may grow to a significantly larger size. As the network expands, the unit costs and price would decline and this would, in turn, result in higher user count and a substantially larger revenue base, the analyst commented.

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