Canaccord Genuity reinstates coverage on Windward

Canaccord Genuity stated elevated churn and contract deferrals among emerging market government customers had led to "a reset in forecasts" but added that Windward's sales momentum and pipeline in commercial and US government continued to "look healthy".

The Canadian bank noted that at a high level, the maritime industry remained "a digital transformation laggard" and very fragmented with sub 250,000 commercial organisations.

"Of these only 130 are currently buying Windward's advanced AI-based industry-specific SaaS solution. The company is addressing this huge TAM by building out a broad suite of highly relevant risk management tools solving individual strategic pain points for customers," said the analysts.

"Our new estimates bake in an achievable and likely conservative 20% sales CAGR, with net cash troughing at $10.0m or roughly 20% of market cap next year before P&L breakeven in 2025. The environment for unprofitable growth stocks remains difficult, but the shares' 1.3x 2024E EV/Sales multiple in our view materially undervalues the business given top-quartile growth, a 99% recurring revenue share, the strong roster of blue chip customers and listed UK peers trading on 3x."

Reporting by Iain Gilbert at Sharecast.com