Pacific Trader: Copperleaf shows its usefulness by beating the market

credit: EY

Jodi Hess, CEO of Copperleaf Technologies, moves upstairs to make room for Paul Sakrzewski

The analytics company serves clients who manage trillions of dollars in infrastructure

Inventory: I pity the folks who bought Copperleaf Technologies (TSX: CPLF) at its initial public offering last October. They watched the stock drop from $15 per share to $6.33 as of Tuesday’s close. Remember, the tech stocks that had most of their earnings (or in Copperleaf’s case all) ahead were still popular in late 2021. Then the nascent inflation started eroding the net present value of those future earnings. Vancouver Analytics is a good company, with the likes of Meta (aka Facebook) platforms (NASDAQ: META) and Shopify (TSX: SHOP) also cut at the knees.

Drivers: But for those who paid attention, Copperleaf stock was rising along the technical support level – dare we say the word? – at recent days. Practically all analysts covering it still believe in its progression toward profitability.

Founded in 2000, Copperleaf is all about big data in a small niche. It develops programs that help power and water utilities plan their investments to meet consumer demands far into the future. This is hard work, almost immune to the vagaries of the economy, and Copperleaf has never lost a customer. Its clients collectively manage about $2.7 trillion Infrastructure value.

In the second quarter ended June 30, Copperleaf reported revenue of $20.6 million, up 23 percent from the same period in 2021. The company’s net loss rose to $7.4 million (11 cents per share), although its total profit from operations It amounted to $15.7 million. So far in the third quarter, the company has won new clients at United Utilities in the United Kingdom and Washington Gas Light Company in the United States.

It also announced a leadership transition in which President Paul Sakrzewski will succeed CEO Jodi Hess effective January 1, 2023. Hess, named EY Entrepreneur of the Year for the Pacific Region in 2021, will remain as Vice President and Chief Strategist.

Street word: “We think stocks are compelling given the multi-year growth trajectory and multiple expansion with Copperleaf prices back close to peers,” RBC Dominion Securities analyst Maxim Matushansky wrote in a report that kicked off the stock coverage. Copperleaf gave a “Superior” rating and a $10 target price.

Coming and Going: Vancouver-based education technology company Thinkific Labs (TSX: THNC) has appointed Steve Krinzer as its new president. Krenzer’s experience includes assignments at Groupon as Chief Operating Officer and Core Digital Media as CEO.

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