B. Riley FBR analyst Josh Nichols initiated coverage of Smith Micro Software with a Buy rating and $5 price target. The company has undergone a "significant" transformation over the past few years, and now has a lean operating cost structure along with a suite of "innovative value-added" solutions that leverage its mobile expertise and carrier relationships, Nichols tells investors in a research note. The analyst expects Smith Micro's operating margins and free cash flow generation to "improve rapidly" given the trajectory of revenue growth and inherent leverage in the asset-light business. He models 36% revenue growth in 2019 and EBITDA margin expansion through 2020.