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Gridsum Is The Early Mover In Chinese Big Data Analytics

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Gridsum Holding Inc – ADR (NASDAQ: GSUM) is the “early mover in big data analytics” in China, and seems to be poised to benefit from the country’s entry into “an information era in which data serves as a key raw material for generating business growth,” Goldman Sachs’ Piyush Mubayi commented in a report.

Mubayi initiated coverage of Gridsum with a Buy and a 12-month price target of $20.60. The price target represents potential upside of 25 percent.

Revenue Growth

China’s move towards the increasing adoption of big data analytics creates an estimated revenue opportunity of $604 million by 2020 for Gridsum, Mubayi stated, adding that the company’s topline growth could come from significant customer base expansion and rising ARPUs.

Apart from having s strong competitive position in big data analytics, Gridsum has significant potential to penetrate new verticals such as financial services, supporting sustainable revenue growth. The analyst projected a gross revenue CAGR of 57 percent in 2016-2018.

Margin Expansion

Mubayi believes Gridsum would be able to generate consistent operating margin expansion by “increased cross-selling of its products and higher monetization of existing data assets.” He expects Gridsum’s operating loss to narrow in 2016, and the company to achieve a positive operating margin of 5.9 percent in 2017.

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Latest Ratings for GSUM

Oct 2016Stifel NicolausInitiates Coverage OnBuy
Oct 2016CitigroupInitiates Coverage OnBuy
Oct 2016Goldman SachsInitiates Coverage OnBuy

View More Analyst Ratings for GSUM
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