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CIBC Keeps $4.00 Price Target, Neutral Rating on Dye & Durham Despite Q3 Miss

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CIBC Capital Market is maintaining a neutral rating and $4.00 price target on the shares of Dye & Durham (DND.TO) even though the company reported a third-quarter earnings miss.

Third-quarter revenue was 4% below consensus, while adjusted EBITDA was 1% above, notes analyst Erin Kyle. Volume declines and softer pricing impacted results, with total revenue down 12% Y/Y.

While declines in the Legal Software business continued to accelerate, management noted it is shifting from a retention-only strategy and is seeing improvements in new customer acquisitions, win-backs and renewals. Cost saving initiatives have helped offset revenue declines, with adjusted EBITDA margins now stable at 47% over the past two quarters, Kyle adds.

Following the sale of Credas, the company also finished the third quarter with a net leverage of 5.5x, below its covenant maximum threshold of 5.8x.

Price: $3.00, Change: $+0.15, Percent Change: +5.26%

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