Emerge Commerce Ltd, an acquirer, and operator of direct-to-consumer (D2C) e-commerce brands, released its 4Q and fiscal 2020 results on April 22 after market close. The company reported record revenue and positive adjusted EBITDA for fiscal 2020. The stock soared by about 6% in early trading on Friday.
Emerge Commerce’s (ECOM) revenue came in at C$9.2 million for the year ended December 31, 2020, up 121% from C$4.2 million in 2019. The company reported a positive adjusted EBITDA of C$0.8 million in 2020, compared to a negative C$0.6 million a year earlier. Gross Merchandise Sales (GMS) improved to C$29.4 million, an increase of 94% from C$4.2 million in 2019.
Meanwhile, revenue was C$2.4 million in 4Q 2020, an improvement of 31% compared to revenue of C$ 1.8 million in 4Q 2019. The company reported a positive adjusted EBITDA of C$0.1 million in the quarter ended December 31, compared to a negative C$0.15 million in the same quarter a year earlier.
Emerge Commerce’s Founder and CEO Ghassan Halazon said, “Simply put, 2020 was a transformative year for Emerge. Revenue more than doubled while the Company became Adjusted EBITDA positive. We successfully completed our go public transaction, strengthened our balance sheet, and shortly after, acquired truLOCAL, adding $20 million in subscription revenue, with strong organic growth, in addition, the transaction was accretive on Day 1.”
Emerge Commerce ended the year with C$12.4 million in cash. After the year, the company raised an additional C$12.1 million. With more than C$20 million in cash, the company is advancing its growing pipeline of acquisitions. (See Emerge Commerce stock analysis on TipRanks)
Last month, Canaccord Genuity analyst Aravinda Galappatthige initiated coverage of ECOM. He gave a Buy rating on the stock with a price target of C$1.75, which implies an upside potential of 53.5% to current levels. Galappatthige is the only analyst to have offered a stock rating for ECOM in the last three months.
On top of that, Emerge Commerce scores a 9 out of 10 on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market. The TipRanks Smart Score is derived from 8 unique data sets including Analyst recommendations, Crowd Wisdom, Hedge Fund Activity, Media Sentiment, and multiple Technical stock factors.