Illumin Holdings earns target raise at Ventum

After a fourth quarter that “exceeded all expectations”, Ventum Capital Markets analyst Rob Goff has raised his price target on Illumin Holdings (Illumin Holdings Stock Quote, Chart, News, Analysts, Financials TSX:ILLM).

On March 14, ILLM reported its Q4 and fiscal 2024 results, In the fourth quarter, the company posted Adjusted EBITDA of $3.9-million on revenue of $49.9-million, a topline that was 35%, year-over-year.

“We delivered strong revenue growth in the fourth quarter, which rose 35% year-over-year fueled by increases across all of our revenue lines,” CEO Simon Cairns said. “During the quarter, we continued to see considerable revenue growth in self-service, which grew 45% year-over-year. This also represents our third consecutive quarter of managed service growth, which increased 28% year-over-year. These results indicate that more companies are recognizing the value of both our managed service and self-service solutions. In addition, we continued to see substantial growth and momentum in our exchange services business, which increased 39% from the prior year.”

Goff says these results were unambiguously positive.

“We are encouraged to see Q4/24 build on the positive momentum and recalibration with the Q3/24 results,” he wrote. “We look for continued strength for 2025 where we have moved our revenue/EBITDA from $142.1M/$6.0M to $153.0M/$7.4M against the pre-quarter consensus (likely to be upgraded) at $148.0M/$9.0M. We are deliberately allowing for higher growth expenditures considering the growth trajectory of H2/25. We look for these investments to support greater EBITDA leverage in 2026+.”

In a research update to clients March 17, Goff maintained his “Buy” rating and raised his price target on the stock from $3.00 to $3.40, implying a return of 30.3% at the time of publication.

The analyst thinks the company will post EBITDA of $7.4-million on revenue of $153.0-million in fiscal 2025.

“The strength of H2/24 results across divisions reflects positively on management moving to simplify the client experience by removing friction points,” Goff added. “Investments have been made to shorten sales and onboarding cycles. Management has deliberately positioned Managed and Self-Service as a continuum rather than discrete service buckets where Managed Services were often deprioritized with fewer resources, and it could be seen as a sunsetting service by clients and investors where we allowed for annual declines in our forecasts.”