DA Davidson analysts recently hosted investor meetings with Park City Group, Inc. PCYG CFO John Merrill and the conversations emphasized the case for being bullish on the stock.
The Analyst
DA Davidson's Tom Forte maintains a Buy rating on Park City Group with an unchanged $11.50 price target.
The Thesis
Merrill served as Park City's CFO from 2006 to 2010 and returned as senior vice president of finance in 2018 before being named CFO in May, Forte wrote in a note. The executive highlighted during the conversations his return to the SaaS company motivated by its opportunities in food safety compliance, supply chain and the MarketPlace platform.
Merrill also explained the 23,000 suppliers that already use Park City's platform represents a total addressable market of $55 million in annual revenue. By comparison, the company end fiscal 2018 with $22 million in sales. As such, Forte said a "simple fine tuning" of the existing go-to-market should alone notably improve sales.
Other potential initiatives to generate growth includes cross-selling its portfolio of products to existing customers. The company has an opportunity to better help retailers maximize sales of seasonal items by connecting retailers with compliant vendors. Specifically, the MarketPlace's core purpose enables retailers to sell short-term and high inventory/high demand items.
Bottom line, Forte said conversations with the CFO "increased our conviction" in Park City's ability to grow its business.
Price Action
Shares of Park City Group traded around $5.51 Monday afternoon.
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