Market Overview

Lake Street Capital Initiates Pareteum, Turnaround Positive


Communications provider Pareteum Corp. (NYSE: TEUM) exhibits well-executed turnaround, underappreciated growth and tremendous share upside.

The Analyst

Lake Street Capital Markets analyst Eric Martinuzzi initiated coverage on Pareteum with a Buy rating and a $5 price target.

The Thesis

In Monday’s note, Martinuzzi outlined the company’s evolution over the past three years, including some highlights such as:

  • The addition of new Executive Chairman, Hal Turner and the multi-phased turnaround effort in 2015.
  • In 2016, the company sold ValidSoft, changed names from Elephant Talk to Pareteum, and revolutionized the business structure and focus to a new communications platform as a service. Later that year, the company returned to profitability and hired CEO Vic Bozzo.
  • 2017 featured a new customer base with 26 contracts covering 45 countries, as well as a strengthened management team and 5 percent growth.
  • In 2018, revenue grew over 60 percent as the company expects to close on the acquisition of Artilium, which will bolster the company’s competitive profile, Martinuzzi said. According to the note, this model assumes the deal closes on Sept. 30.

According to Martinuzzi, one of the potential investment risks surrounding Pareteum stock involves revenue concentration.

“As of Q2’18 two customers (Vodafone and Zain) made up 75% of total revenue. This is down from 97% in Q2’17. While this is a significant exposure, we do not believe either relationship is at risk. We expect the implementation of new accounts in backlog to reduce the risk over time.”

Price Action

Pareteum shares closed up 4.9 percent at $2.97 Monday.

Related Links

Sprint, T-Mobile Merger Looks More Likely As DOJ Calls For Just 3 Leading 5G Carriers

Move Over Verizon, T-Mobile Is The New Top Mobile Network

Latest Ratings for TEUM

Oct 2019DowngradesOutperformPerform
Oct 2019DowngradesOutperformMarket Perform
Oct 2019DowngradesBuyHold

View More Analyst Ratings for TEUM
View the Latest Analyst Ratings

Posted-In: Eric Martinuzzi Lake Street Capital Markets mobile network ValidSoftAnalyst Color Price Target Initiation Analyst Ratings


Related Articles (TEUM)

View Comments and Join the Discussion!

Latest Ratings

CLDRMorgan StanleyMaintains12.0
TSLAMorgan StanleyMaintains250.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Most Americans Still Get News From Social Media, But Many Question Its Accuracy

Google Home Is Gaining Ground On Amazon Echo