Spectra7 Microsystems Inc V.SEV

Time to look at the numbers

[Pokerchamp]

Lets look at the numbers.
 
Here are revenues over the last five quarters.
 

2016				2017
Q1	Q2	Q3	Q4	Q1
2.54	2.60	1.00	2.46	2.70

 
Over the last quarter, revenues went from $2.46 to around $2.7 million.or $240,000 or just under 10%.
 
Applying that growth rate to the full year while keeping margins at 60%% and expenses at $3.8 million gives us the following.
 

			Gross			Loss
2017	Revenues	Margin	Margin	Expenses	Loss	Per Share
Q1	2.70	60%	1.62	3.80	-2.18	-1.48
Q2	2.97	60%	1.78	3.80	-2.02	-1.37
Q3	3.27	60%	1.96	3.80	-1.84	-1.25
Q4	3.59	60%	2.16	3.80	-1.64	-1.12
2017 Total	12.53	60%	7.52	15.20	-7.68	-5.23

 
A couple of conclusions to be drawn from this.
1.  AR/VR cable sales are growing at a slow rate. 
2.  If this does not improve and Data Center sales are not significant for 2017, S7 will lose around $7 million this year.
3. They will need to do another financing by summer
 
Now S7 is clearly the gold standard in AR/VR/MR interconnects.  Unfortunately AR/VR/MR sales growth has been anemic.  There just hasn’t been a killer app to grab the market unless they can monetize their surplus patents.
 
S7’s future lies mainly in Data Center sales.  DC cables are now being tested by a large number of companies.  Sales according to the company are unlikely to be significant this year, so we will have to wait till Q1 2018  to see how well S7 does in this market.  It could be huge, a good share of the $2.1 Billion in DC cables S7 will cmpete for.  If it can capture even 5% of that market that’s $100 million in revenues and at a 70% margin, that’s a game changes.and will move S7 into the $2 to $4 dollar range.  But the start of real revenues is at least 12 moths away according to Raouf .
 
This explains why analysts are calling for around a 60 cent target for S7 in twelve months.