Two junior stocks analysts love in this market

CloudMD

Following recent news from the company, Beacon Securities analyst Gabriel Leung is maintaining his bullish stance on CloudMD (CloudMD Stock Quote, Chart, News, Analysts, Financials TSXV:DOC).

On August 23, CloudMD announced a new contract for remote patient monitoring with what it described as a “major” U.S. hospital system.

Leung says he thinks this is a positive, but says he is taking a wait-and-see attitude towards the development.

“We understand this contract will be rolled out over time and has the potential of generating ~US$120 per patient per month to CloudMD (to be reimbursed by CMS), which suggests an addressable opportunity of ~US$36M once fully deployed,” he said. “Beyond the initial RPM services, CloudMD believes that, over time, it could add other proprietary technologies such as iCBT and its Glucose Monitoring System (which is currently in pilot phase).We expect to get more details around this contract as it is rolled out over time. Specifically, we believe the company will begin to offer data points such as patients on-boarded to help provide colour around deployment progress. We understand that the company has additional RPM opportunities in its pipeline, although not to the scale of today’s announcement.At this point, we are not adjusting our estimates pending additional details. However, we do view this as a positive development for the company as it provides another lever for (material) organic growth.”

In a research update to clients August 23,Leung maintained his “Speculative Buy” rating and one-year price target of $0.50 on DOC, implying a return of 317 per cent at the time of publication.

Coveo Solutions

Recently white-hot tech stock Coveo Solutions (Coveo Solutions Stock Quote, Charts, News, Analysts, Financials TSX:CVO) has nearly doubled in value over the past couple of months. But investors shouldn’t be thinking the party’s over — according to Eight Capital analyst Adhir Kadve, there’s more upside to be had in this AI-enabled business solutions name.

After reviewing the latest quarterly numbers from the company, Kadve reiterated a “Buy” rating on Coveo in an August report.

Coveo, a global provider of artificial intelligence-powered solutions for e-commerce, customer service, website and workplace applications, issued its first quarter fiscal 2024 financials on Tuesday. The company reported SaaS Subscription Revenue up 19 per cent year-over-year to $28.5 million and an adjusted operating loss of $2.8 million compared to a loss of $7.5 million a year earlier.

Kadve said he likes the setup for Coveo heading into the rest of 2023 and beyond. He noted that management has said it will need less than $15 million in cash from operations for the business to become cash flow positive.

“We are maintaining our Buy rating but increasing our target to $13.50/share (from $12.00/share). Coveo currently trades at 4.6x C24E EV/Sales versus a peer group of SaaS-based Data and Analytics platforms that trade at 7.1x and Canadian SaaS peers at 5.6x. Our target implies 6.5x C24E EV/Sales (versus the previous 5.0x),” Kadve wrote.

The analyst’s new estimates are calling for full fiscal 2024 revenue of $128.0 million and adjusted operating income of negative $11.5 million. For fiscal 2025, he is forecasting $153.2 million in revenue and negative $.4 million in adjusted operating income