VIQ Solutions Inc. (TSX:VQS) is “revolutionizing the transcription market,” according to one analyst
Capital Ideas Media | March 16, 2021 | SmallCapPower: When one thinks of transcriptions a court stenographer, or reporter, might come to mind but these services are much more prevalent in the business world than one might imagine, as it is being used in markets such as legal, insurance, media, and law enforcement.
(Originally published on Capital Ideas Media on February 2, 2021)
Canadian company VIQ Solutions Inc. (TSX:VQS) has developed an Artificial Intelligence (AI)-driven, “industry-leading” digital voice and video capture technology that is “revolutionizing the transcription market,” according to Acumen Capital analyst Jim Byrne.
[Editor’s Note: Shares of VIQ Solutions have gained more than 5% since Capital Ideas wrote about the company about six weeks ago.]
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Mr. Byrne says VIQ’s proprietary platform is unique among its peers given the secure, comprehensive end-to-end workflow solution that reduces cost, simplifies access, and increases efficiencies for their customers.
Transcription services have existed for many years but have only recently been moving towards digitalization. In the past, transcriptions were a slow, manual process that was prone to errors and lacking in security of information.
VIQ Solutions, however, has developed a proprietary technology that increases the accuracy, speed, and efficiency of transcriptions, as well as the ability to capture multiple speakers, while also delivering “military-grade” cybersecurity through the cloud.
“The company has identified several opportunities for cross-selling among its existing client base while pursuing further market share gains to drive organic growth,” the Acumen Capital analyst said.
“In addition, VIQ has potentially hundreds of acquisition targets in its current geographies, along with potential new locations to launch its business.”
During its most recent quarter (Q3 2020), VIQ saw its revenue increase 27% year-over-year to US$8.2 million, about 71% of which was derived from the United States, while its Adjusted EBITDA surged 305% to US$1.9 million.
For 2021, the Company expects to generate “significant top-line growth and positive net income and earnings per share,” while setting the stage for annual revenue growth of up to 50% through organic growth and accretive acquisitions.
Mr. Byrne believes the recurring nature of VIQ’s revenue in addition to its long-term contracts should also lead to margin expansion.
As well, VIQ recently raised about US$15.3 million in an equity financing, which it said will be used to fund future acquisitions and for continued product and service development.
And yet, the Company still has less than 26 million fully-diluted shares outstanding.
VIQ estimates its total addressable market size at US$10.6 billion for 2021.
Finally, a big plus for its stock was the Company’s recent up-listing to the TSX, from the Venture exchange, and VIQ said it also expects to be listed on the NASDAQ sometime in 2021.
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