The group has started 2017 well with two significant contracts – a highly prospective one for driver behaviour in NY for ride firms such as Uber and Lyft, followed by a pilot programme for driver safety and distribution costs savings with FEMSA (Coca-Cola’s largest public bottler). A strong performance in these contracts bodes well for future earnings. Pointer has also announced better than expected 2016 operating results, helped by margin-boosting operational leverage, and acquisition of Cielo Telecom in Q4. Management has also issued guidance for over 10% revenue and 20% EBITDA growth this year, which accords with our increased earnings expectations. Helped by this, we have revised our share valuation, which is based on peer multiples, from $8.85 (NIS 33.9) to $10.8 (NIS39.6). This is supported by our DCF valuation of $14.9 (NIS 54.7) per share.

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