Analyst Research Report Snapshot

Title:

Email Delivery Leader Poised for Rapid Growth Dividend Yield of 9.1%

Price:

$10.00

Provider:

RedChip Companies, Inc.

Date:

11 Nov 2013

Pages:

11

Type:

AcrobatPDF

Companies referenced:

SMTP.OB

Available for Immediate Download
Summary:

SMTP is a leading provider of services to facilitate email delivery, with a focus on marketing email delivery, but also supporting bulk and transactional sending, reputation management, compliance auditing, abuse processing and issue resolution. Their services provide customers with the ability to increase the deliverability of email with less time, cost and complexity than handling it themselves. Looking forward, we expect SMTP to rapidly expand both revenue and net income growth, driven by its new executive management team, focused sales and marketing spending, and enhancements to its core email-delivery platform. SMTP is trading well below both our peer group median and peer group average in P/E, P/S and EV/EBITDA, despite the Company's stronger future revenue growth prospects, robust net margins and strong dividend yield. We believe that the market is significantly undervaluing SMTP, given our expectations of accelerated revenue growth (54% in FY14, 75% in FY15) and the fact that this is accomplished while maintaining robust dividends ($0.08 per share in FY14E, $0.18 per share in FY15E).

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