UK equity research firm Arden Partners gave digital audio and social media company Audioboom Group PLC (BOOM.L) a “buy” rating and a 14p price target for 2014 upon initiating coverage on the stock in mid-June.
According to Arden Partners, the company is destined for growth this year as a lone contender in its niche, and for its valuation, monetization strategy, and potential for a takeover or consolidation bid.
The firm noted Audioboom’s dramatic share price increase from 1.5p per share in May to 5.9p early June, translating to a 293 percent increase for the company’s stocks.
Arden Partners also noted that based on its financial forecasts, Audioboom is bound to increase its earnings from literally nothing to £6.4m in two years.
Additionally, the firm said, with established social media companies such as Linked In, Facebook and Spotify valued at an average of $100 per user, it’s not far from possible for Audioboom to be in the same ballpark.
Other highlights of Arden Partner’s stock report include comprehensive details about Audioboom’s revenue model and monetization strategy, competitors, and a discussion about its gross margin.
Arden Partners give stocks a “buy” rating if they predict the company’s share prices to rise by ten percent over the next 12 months.
The company stated in its disclosure that it takes into account “a variety of elements, including fundamental analysis, current and expected cash flow, profits and losses, forecast investment ratios as well as the management skills and the net assets of a company” when giving stocks a buy rating.
Arden Partner also serves as a corporate broker for Audioboom, it also noted in its disclosure.
Audioboom has a wide global customer base with some 40 percent concentrated in the United Kingdom, 30 percent in the United States, 10 percent in Latin America and 15 percent in Australia, the research report noted.
It is the only social media company listed on the London Stock Exchange and is the only company that has successfully broken through its niche (i.e. spoken word) in the UK and beyond as well.
Beaufort Securities, another research firm based in the UK, also initiated coverage on the tech stock early in June, the Australian Edition of IBTimes reported on Monday. Beaufort Securities also declared the stock a “buy.”
Hailed as the spoken word counterpart of YouTube, Audioboo is forecasted to expand rapidly in upcoming months due to its growing roster of media content partners including BBC, CBS, Sky Sports, and Channel 4 News.
An average of 80,000 audio consumers registers for a new membership account on Audioboo per month, according to its web presentation. Meanwhile, an estimated 300 channels per month are created on its platform.