18th Aug 2015 09:59
LONDON (Alliance News) - Panmure Gordon holds its Earthport forecasts following the launch of of the company's global gateway payment system, because the payments firm is not expected to be profitable until 2017.
Earthport said it has partnered with Ripple Labs to enhance its global gateway by enabling real-time cross-border payments via a distributed ledger protocol for use by banks.
"The benefits to users are that it is easier to adopt, more efficient and faster. It can provide banks with instant liquidity and the best foreign exchange rates while at the same time reducing counter-party risk. It has attracted significant interest from potential clients," says analyst Keith Baird.
"In order to maximise the major potential long term value in the business Earthport is increasing investment which defers expected profitability to the 2017 financial year," he adds.
Baird says his estimates remain unchanged because he recently upgraded forecasts based on the increased investment which will lead to delayed profitability. Baird says the USD30 million cash balance at the end of June will "more than cover these investment needs".
Panmure reiterates its Buy rating with a 61.0 pence price target.
Eartport shares are trading down 1% to 43.06 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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