Trevor Rose's Insights
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. EPS of ($0.065) matched expectations and revenues of $1.81M doubled expectations of $0.9M.
For the full-year the company generated sales of $2.2M, indicating its significant ramp up in revenues into the latter half of the year. Its revenue jump is attributable to the execution of engineering services agreements, however, its operating costs increased as a result of a higher headcount. The revenue jump is encouraging, however, its net less grew from ($24.6M) in the prior year to ($40.0M) in the most recent year.
The company's balance sheet is OK and it continues to operate at a loss and with negative free cash flows.
We would like to see the company accelerate its revenues faster than operating costs, and while its revenue growth and momentum look good, we would consider it to be a higher risk name at this point.
We would be OK with this name as a high-risk name, while being mindful of its small-cap risks, significant unprofitability, and position sizing.