Tuesday, 8 May 2007

Griffin Securities Initiates Research on LMS Medical with $7 Target


Today Griffin Securities of New York initiated research on LMS with a 12 month target of $7.00 CND or $6.25 USD.

Analysts Chrystyna Bedrij, Mathew Rothway and Ted Harlan, CFA stated "We believe LMS has a scalable business model with high margins. LMS is a software business that is highly scalable. We believe that LMS’ competitive advantages include: a strong patent position; regulatory approvals (including FDA); expertise; the largest obstetrics patient database; a product suite which includes the CALM Clinical Information Systems™ (CIS) (which is the system’s "mission control"); and risk management tool modules that interface with the CIS."

"Importantly, LMS recently launched its interface module that seamlessly connects to McKesson’s hospital enterprise solution as well as to other hospital enterprise systems. Given that there are over 3,000 hospitals with obstetrics departments and more than 4 million births each year in the US, LMS is addressing a fertile market with a potential of approximately $800 million revenue on an annual basis. We estimate that Europe increases that market opportunity by an additional $400 million per annum. With the challenges that are foremost in obstetrics being directly addressed by LMS’ CALM™ product suite, we expect the Company’s leading solutions to transform obstetrical care management and believe LMS shares represent a favorable investment opportunity. Based on multiple valuation approaches, we are establishing a 12-month price target of US$6.25 per share for LMS Medical Systems on the AMEX and CAD$7.00 per share on the TSX. "

As of this writing, LMS stock was looking at a record trading day with in excess of 560 thousand shares traded while moving from the $1.25 to the $1.45 range.

Over the next month, LMS President Diane Cote will be presenting to investment community audiences in Montreal, Vancouver, Boston, New York as well as in Europe through Griffin Securities.

To view the full report, including a detailed revenue and discounted cash flow model please click here.