EagleView Technology Corp.

The negative outlook primarily reflects our forecast for very weak credit measures in 2021, including negative free operating cash flow generation, and that a material underperformance relative to our base case may lead to ongoing FOCF deficits and our view that the capital structure is unsustainable. We could lower the rating over the next 12 months if the company fails to demonstrate an improvement in operating performance and expense management, leading to sustained cash flow deficits through 2022. We believe this could occur if: Capital expenditures are materially higher than we expect; Revenue declines from slower adoption of new products and enhancements or minimal weather-related damage; or Significant margin contraction from the low- to mid-40% area. We could revise the

...The negative outlook continues to reflect the risk of persistent free operating cash flow (FOCF) deficits. Despite the improvement in operating performance and a return to positive FOCF in 2020, we expect EagleView Technology Corp. to generate negative FOCF in 2021 due to elevated expenses from investment in product innovation. The company's revenue increased 12.3% in the 12-month period ending March 2021 after four consecutive quarters of revenue decline through fiscal 2019. This return to growth was a direct result of the company's resilient business model thanks to the nature of its government-based contracts, normalized weather activity, and regained profitability from the permanent injunction against Verisk. Over that period, the company's margin also significantly expanded to 46.6% from 27.1% in the prior-year period, driven by revenue growth, reduced legal expenses, and cost efficiencies. However, we forecast modest negative FOCF by year-end 2021, as the company increases investments...

Full Report