Headquartered in Toronto, Ontario, EQ, one of the largest providers of location-based data in Canada, uses unique data sets, advanced analytics, machine learning and artificial intelligence, to enable businesses to understand, predict, and influence customer behaviour.
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I’m Fiona Forbes for Investmentpitch Media
Today’s latest Equity Research report on EQ Inc. comes from eResearch Corporation.
Analyst Chris Thompson gives EQ Inc. a one-year target price of $2.00, a premium of 39% to the $1.44 price on June 1st, 2020, the day the report was issued.
The full report is available on www.eResearch.com.
Headquartered in Toronto, Ontario, EQ, one of the largest providers of location-based data in Canada, uses unique data sets, advanced analytics, machine learning and artificial intelligence, to enable businesses to understand, predict, and influence customer behaviour.
EQ adds, on a daily basis, more than 7 terabytes of unique first-party location-based data to its 1 petabyte of data.
To augment its extensive database, EQ has secured licencing agreements with a number of third-party data providers, including Opta, Mastercard, Statistics Canada, and TMG Analytics.
With 3 million locations mapped, reaching more than 18 million unique individuals in Canada, the company processes more than 15 billion data points daily.
Through its ATOM platform, the company provides small and medium sized business with the tools to execute digital advertising campaigns.
Combining a variety of criteria such as age, demographics, gender, behaviour, etc., with location-based features, ATOM targets consumers within a one mile range from any street in North America.
Its Visilink digital advertising verification platform measures performance while protecting against online ad fraud.
The company’s LOCUS Data Management Platform is a location-based advertising tool that facilitates the creation of audiences for advertising and marketing campaigns.
Leveraging its expertise with geospatial data, EQ has created a mobile app for COVID-19 contact tracing and is awaiting completion of due diligence by the government.
In the past year, EQ has leveraged its experience in location-based technologies to venture beyond the advertising industry, with the automotive, financial and insurance sectors being key revenue drivers.
EQ added 62 new clients during 2019 and 18 new clients in the first quarter of 2020, including some of the world’s largest brands and agencies.
Revenue growth in 2019 was over 52%, reaching $9.0 million in annual sales with data revenue growing at 73% year-over-year.
Although the U.S. is the largest ad market in the world, it currently only accounts for 16% of EQ’s revenue, and, according to AdWeek, the advertising industry in the U.S. is expected to spend almost US$390 billion in 2020.
By the end of 2020, eMarketer expects companies in the U.S. to spend over US$150 billion on digital ads versus US$107 billion on traditional ads, with two-thirds of the ads targeting mobile devices.
Worldwide, by 2023, digital ads will capture over 60% of all ad spending and reach over US$517 billion.
Chris Thomson, Director of Equity Research, stated: “By shifting some sales & marketing efforts to the U.S. market, there is the potential for EQ to significantly increase revenue. As EQ continues with its U.S. expansion, an acquisition of a U.S.-based company could speed up revenue growth and client acquisition. We estimate revenue growing to $23.1 million by 2022 with an EBITDA of $5.6 million.”
EQ has demonstrated the ability to grow revenue organically through product development, making tactical business acquisitions when the company saw a need to fill a technical or skills gap.
The October 2018 acquisition of Tapped Networks Inc., an Ontario-based company focused on mobile marketing solutions, was followed by the March 2020 acquisition of certain assets of Curate Mobile Ltd., including Juice Mobile, a marketing platform targeting advertisers looking to increase user engagement or brand awareness on mobile devices.
The company recently partnered with Media City to better connect online and offline media by enabling measurement of Digital-Out-Of-Home placements.
Geoffrey Rotstein, President and CEO of EQ, stated: “We are thrilled to be partnering with Media City. The power of OOH (Out-of-Home) and digital attribution is well-known. By bringing together two Canadian companies, we are able to provide valuable measurement capabilities to brands and to agencies.”
The company has a strong balance sheet, following the completion of a $5.2 million financing in December 2019.
The shares are trading at $1.44, a significant discount to eResearch’s $2.00 target price.
For more information please visit the company’s website www.EQworks.com, contact Peter Kanniah, CFO, at 416-260-4326 or by email at peter.kanniah@EQworks.com.
Chris Thompson, Director of Equity Research, commented on eResearch’s products: “eResearch Corporation, founded in 2000, is a respected source for institutional-quality, equity research focused primarily on small- and mid-cap companies. Our focus is to identify companies that have near-term catalysts, sound management, and significant potential for share price appreciation. We complement our corporate research coverage with a diversified selection of informative, insightful, and thought-provoking research publications from a wide variety of investment professionals. We provide our professional investment research and analysis directly to our extensive subscriber network of discerning investors, and electronically through our website, www.eresearch.com.”
I’m Fiona Forbes for Investmentpitch Media
