One of the best performers on the Australian share market on Monday has been the Livetiles Ltd (ASX: LVT) share price.
At one stage the technology company's shares were up as much as 14% to 44.5 cents. They have since given back some of these gains, but still sit 8% higher at 41.5 cents.
Why is the LiveTiles share price storming higher?
The LiveTiles share price was given a major boost today after a leading broker initiated coverage on the workplace platform provider with a positive view.
According to a note out of Citi, it has given LiveTiles a (high risk) buy rating with a sizeable 56 cents price target on its shares.
Even after today's strong gain this still implies potential upside of almost 35% for its shares over the next 12 months.
Citi has made the move on the back of LiveTiles' arrangement with key Microsoft sales and marketing vendor N3, believing that it has the potential to be material.
Earlier this month LiveTiles announced a partnership with the New York government to establish a North American Intelligent User Experience (IUX) Hub in Rochester, New York.
The Hub will house a team of 60 new staff members, more than doubling its current sales and marketing footprint, and is part of its strategic relationship with N3 which sees the latter supply dedicated employees.
Management expects the Hub to be integral to driving its North American expansion. And with N3 on board they could be spot on.
N3 is the leading outsourced sales and marketing execution vendor for Microsoft's Azure and Dynamics platforms and serves a global client base including SAP, IBM and Cisco.
It has been instrumental in the implementation and execution of Microsoft's integrated cloud sales strategy for the past six years, delivering significant revenue growth for Microsoft and its partners.
LiveTiles' management team expect similar success with their relationship. It has previously stated its belief that N3's expertise in the Microsoft ecosystem and sophisticated sales and marketing platform will generate strong and highly scalable customer and revenue growth for LiveTiles.
Should you invest?
I think that LiveTiles is one of the most exciting small cap tech shares on the Australian share market.
But as Citi's rating indicates, it is a high risk investment and largely unsuitable for the average investor. But if you can tolerate the risk, then it might be worth considering a small investment in the company.
If not, then tech shares such as Integrated Research Limited (ASX: IRI) and Technology One Limited (ASX: TNE) may be more suitable.
