This week, Infrastructure technology stock ikeGPS Ltd (ASX: IKE) delivered a positive fourth quarter report, which the analyst team at Shaw and Partners says backs up their buy recommendation on the company.
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Infrastructure play
So what does ikeGPS actually do?
The company offers software products which help infrastructure companies analyse and manage poles and overhead assets, with their customers including electric utilities, communications companies and engineering services companies.
In the company's fourth quarter report released this week, management made the case that they were well-placed to take advantage of major economic trends.
As they said:
IKE operates at the intersection of several of the most powerful structural investment cycles in the North American economy. US electric utility capital expenditure is projected at between US$1.1 trillion and US$1.4 trillion from 2025 to 2030 — approximately US$194 billion in 2025 alone, growing at an 8.5% five-year CAGR. The United States electric grid must scale from providing 20% to 50% of national energy capacity by 2050.
The company said much of this capital would be in distribution, which was where ikeGPS operates.
They added:
Layered on top of grid capacity investment, 130 million wooden poles across North America are approaching the 45-to-50-year failure threshold. Up to 35 million poles will require replacement or reinforcement by 2035. Severe weather events now account for 80% of major US outages. The requirement for digital pole intelligence is not discretionary — it is increasingly mandated for reliability and resiliency compliance by regulators, by utilities themselves, and by the federal grant programmes investing in distribution network modernisation.
Strong growth forecast
In its update this week ikeGPS reported that it had delivered 33% growth in platform subscription revenue over its full year to the end of March, with revenue coming in at NZ$19.2 million.
The company said it achieved positive EBITDA in the month of March and was expecting another strong year going forward.
As the company said:
We believe IKE enters FY27 with strong momentum across subscription revenue growth, product development, customer acquisition, and market positioning. We expect platform subscription revenue in FY27 at similar growth rates to those achieved in FY26. Our balance sheet is strong, our pipeline is strong, our two new customer council-led products are progressing on plan, and the macro tailwinds underpinning our market are strengthening, not weakening.
Shares looking cheap
Shaw and Partners said in a note to its clients this week that the guidance for similar growth to last year "puts IKE in a rare category''.
The broker has a buy recommendation on ikeGPS with a high risk rating, and a price target of $1.40, compared with the current price of 92 cents.
