Synacor Inc. (NASDAQ: SYNC) watched its shares absolutely explode early on Thursday following a contract with a telecom giant. The company announced that AT&T Inc. (NYSE: T) has awarded a portal services contract to Synacor. We can look forward to some heavier volume in Thursday’s session as this stock appears to be a day trader’s dream.
Expected revenues from the contract are roughly $100 million per year after full product deployment in 2017. Currently Thomson Reuters expects revenues to be 127.8 million for the 2016 full year. Tacking on this extra revenue stream, would practically double the current annual estimate.
When the markets closed on Wednesday, Synacor only had a market cap of roughly $42 million, after the announcement the market cap jumped to roughly $102 million.
As per the contract, Synacor will:
- Develop and manage innovative desktop and mobile portal services designed to drive user engagement
- Populate these experiences with rich content sourced from popular brands
- Monetize these experiences through search and advertising
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Himesh Bhise, CEO of Synacor, commented:
We are honored to have been selected from among the contenders AT&T considered in their evaluation process. We are thrilled that AT&T will be using our managed portal services, mobile apps, and advertising solutions in this important initiative to deepen engagement with their customers. We already are developing initial products for deployment in 2016, and have started working on a next-gen product for 2017.
Shares of Synacor closed Wednesday at $1.41, with a consensus analyst price target of $2.95 and a 52-week trading range of $1.03 to $2.10. Following the release, the stock was up 143% at $3.43 in early trading indications Thursday.
Shares of AT&T closed Wednesday at $38.88, with a consensus price target of $39.55 and a 52-week trading range of $30.97 to $39.72.
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