LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity stood by their 'buy' rating on identity management company GB Group on Monday after the US Congress signed off on a second major economic stimulus program over the weekend.
Canaccord said the stimulus program, which also includes a renewed Paycheck Protection Program for small-to-medium enterprises impacted by the Covid-19 pandemic, would help drive revenues for GB,

The Canadian broker highlighted that GB revenues grew more than 70% organically in the first half of the year, and believe its subsidiary IDology saw "a material single-digit" benefit to its identity verification and authentication solutions from the first instalment of the PPP program, where IDology was one of several identity verification service providers.

While management characterised the growth as "a one-off project" at the time of its interim results, Canaccord believes it to now be "highly likely" that GB Group will see "a second wave of demand" for its solutions, potentially contributing a low-to-mid single-digit benefit to organic growth in the second half.

Canaccord did acknowledge that the second PPP was for $284.0bn though, less than half the $525.0bn seen in the first round.

"In the short term this news makes us incrementally more confident that GB Group can exceed consensus expectations. In the mid-to-long term we expect secular demand drivers for its fraud prevention and customer validation and verification solutions to continue to drive double-digit organic earnings per share growth," concluded the analysts, who also maintained their 1,085.0p target price on the stock.

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