Canadian Software Play is Helping Take a Byte Out of Crime

Magnet Forensics Inc. (TSX:MAGT) shares have surged more than 85% since Capital Ideas wrote about the company about 10 weeks ago

Capital Ideas Media | August 25, 2021 | SmallCapPower: Digital evidence is becoming increasingly important in solving crimes. Thus, more and more investigators are turning to software products from Canadian company Magnet Forensics Inc. (TSX:MAGT) to help find thought-to-be deleted digital evidence, such as social media conversations.

(Originally published on Capital Ideas Media on June 8, 2021)

Win Big With Our Small Cap Picks


In fact, Magnet Forensics programs have already been used by high-profile organizations such as Scotland Yard and the FBI.

[Editor’s Note: Shares of Magnet Forensics have climbed more than 85% since Capital Ideas wrote about the company about 10 weeks ago.] 

Canaccord Genuity analyst Doug Taylor, who recently initiated coverage on the stock with a ‘Buy’ rating, said Magnet Forensics is “rapidly gaining (market) share with law enforcement and corporate customers.”

“The Company targets 30 percent annual revenue growth in its largely recurring revenue base through expansion of its revenue per customer and new customer additions,” Mr. Taylor wrote, emphasizing that “strong revenue growth and free cash flow are expected to be the primary drivers of share price appreciation.”

The Canaccord analyst also noted that investors should like Magnet’s 93-95 percent gross margins, 70 percent-plus recurring revenue (and growing), and 120 percent net dollar retention rate.

BMO Nesbitt Burns analyst Thanos Moschopoulos, meanwhile, considers the stock “attractive given this rare combination of growth and profitability, which, in our view, isn’t adequately reflected in its current valuation.”

During its most recently-reported quarter (Q1 2021), Magnet Forensics saw its revenue rise 25% year over year to US$14.7 million, while its net income for the period surged 140% to $2.8 million.

To read our full disclosure, please click on the button below: