Bridgeline Digital, Inc. (BLIN) Research Update Released
New York, NY - September 3, 2014 (www.investorideas.com newswire) On September 2, 2014, Taglich Brothers released an updated research report on Bridgeline Digital, Inc. (BLIN) and reiterated a Speculative Buy rating with the 12-month price target lowered to $1.10 per share from $1.20 per share. The report noted the following key investment considerations:
The company’s iAPPSds subscription micro-site offering has growth potential since BLIN has deployed over 2,300 in a potential market of 1.5 million sites in North America. We project at least 16,000 active BLIN iAPPSds sites in FY17.
BLIN commenced deployment of two large iAPPSds contracts for 3,700 sites and 1,200 sites, respectively. We project $750,000 in quarterly sales when all 4,900 iAPPSds subscription sites are active.
The iAPPSds micro-site platform should have over 10,000 sites booked and ready for deployment by December 31, 2014. We estimate a subscription/perpetual license gross margin in excess of 77% in FY15, up from 71.3% in FY14, driven by a $2.5 million increase in iAPPSds revenue to $8.4 million.
In 3Q14 (reported 8/14/14) sales increased 9.9% to $6.2 million due to growth of 65% in subscription/perpetual license revenue to $1.5 million. Loss per share was ($0.06) vs. ($0.10). We projected sales of $6 million and a loss of ($0.07) per share.
We are maintaining our FY14 sales forecast of $24 million. Due to an improvement in our total gross margin forecast to 49.4% (prior was 47.2%), we reduced our loss per share projection to ($0.29) from ($0.32). Gross margin improvement is due to growth in higher-margin iAPPSds sales.
In FY15 we project 17.4% sales growth to $28.2 million, reflecting a 41.3% increase in subscription/perpetual license revenue due to iAPPSds sales. The pace of iAPPSds deployments will determine when positive cash flow is achieved. We project cash burn narrowing to $545,000 from $2.8 million in FY14. We project a loss per share of ($0.16) on gross margin of 53.6% from 49.4% in FY14, reflecting higher margin iAPPSds sales.
Bridgeline Digital Inc., headquartered in Woburn, Massachusetts is a developer of software technology, tools, and service that enable organizations to optimize their online business processes. The company’s iAPPS technology suite's aim is to unify web content management, analytics, e-commerce, and e-marketing capabilities that enhance both web and customer experience management capabilities.
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