CounterPath Corporation (NASDAQ:CPAH) stunned investors with massive gains of above 114% in the last month alone, thanks to analysts upgrades and strong future fundamentals. The company’s financial numbers are also impressing and boosting investor’s sentiments. Zacks Investment Research has recently increased their price target for CPAH stock and upgraded it from hold to a buy rating.
Source: FinViz
Moreover, some other major analysts expect a strong price appreciation for CounterPath stock in 2018. CounterPath currently trades around $5 a share, slightly lower from the 52-week high of $6.7 a share.
The company’s financial numbers are very strong to support its share price momentum. In the latest quarter, its revenue increased 24% to $3.4 million, compared to the revenue of $2.8 million in the same period last year. Its revenue also increased 10% over the first quarter, representing continues growth quarter over quarter and year over year.
The improvement in gross margin from 83% in the second quarter of 2017 to 89% in Q2 2018 signifies smart management and disciplined business strategies.
“We continue to execute against our strategy and gain operating leverage from our software platform, evidenced by delivering revenue growth over last year and positive earnings this quarter,” said Donovan Jones, President and Chief Executive Officer.
The company’s recent agreement with an international service provider that has tens of millions of users represents strong demand for its products. The company has already completed its customization services to allow the service provider to use its software in the following quarters.
CounterPath has been experiencing strong deployment of its SDK/API, while several contact center solution providers are installing its software. Furthermore, the company has also been increasing its cloud-based subscription platforms with small businesses. It also appears in a strong cash position to invest in growth opportunities.
The company ended the latest quarter with $178 million in cash. CounterPath’s management expects to generate a strong growth in revenue and earnings in the following quarters, thanks to its recent contracts with leading companies and a solid demand for its cloud-based subscription platforms along with the deployment of SDK/API. Therefore, CPAH stock is likely to sustain the momentum.
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