SWK’s 3Q19 update provides more clarity on expected 2H19 earnings after the Company flagged a weaker second half performance at the interims. The update was largely in line with our expectations, although we have conservatively moved our FY19 EBITDA forecast toward the lower end of the $27.5-29.5m guided EBITDA range. In our view, a short-term hiatus in performance in acceptable given SWK’s strategic pursuit of positive longer term outcomes. Cash flow was solid in 3Q and the $210m value of renewals and new contracts in 2H19 a key positive takeaway. SPEC BUY maintained.
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