MiX Telematics Limited

MIXT : NYSE : US$9.90
MIX : JSE
BUY 
Target: US$19.00

COMPANY DESCRIPTION:
MiX Telematics is a leading global provider of fleet and mobile
asset management solutions delivered as SaaS to customers in
over 100 countries. The company’s products and services provide
enterprise fleets, small fleets and consumers with solutions for
safety, efficiency and security.

Technology — Communications Technology — Software
STRONG Q4/F14 RESULTS AND F2015 GUIDANCE;
WELL POSITIONED FOR LONG-TERM GROWTH WITH ATTRACTIVE VALUATION
Investment recommendation:

MiX Telematics reported Q4/F2014
results with subscription revenue and adjusted EBITDA ahead of our
estimates. Further, MiX issued F2015 guidance with subscription
revenue slightly above our estimates but adjusted EBITDA slightly below
due to ramping investments to drive longer-term growth. Given its
strong balance sheet, we believe MiX is investing to drive growth in
markets such as North America and South America to drive accelerated
recurring revenue subscription growth exiting F2015 and beyond. We
believe MiX has a strong solution for its targeted customers and has
strong long-term growth drivers. Therefore, we believe MiX’s current
valuation versus its competitors represents an attractive entry point. We
reiterate our BUY rating and $19 price target.
Investment highlights
 MiX reported Q4/F2014 results with a subscriber base of 451k and
subscription revenue of R233M ahead of our 448k/R222M
estimates. Subscriptions grew 25.3% Y/Y and subscription revenue
grew 24.9% Y/Y.
 Given MiX’s strong base of fotune 500 companies –

Valuation: Our $19 price target is based on shares trading at a multiple
of roughly 14x EV/adjusted EBITDA based on our F2016 estimates

 

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