How's that for a start to the New Year!Wow - I didn't expect much to happen this week in terms of news, and so imagine my surprise to see the price drop on Symbility today.
After digesting the news release, it appears this customer represented $5.8 M of revenue in 2013. Additionally, Symbility stated that it now estimates that it will achieve $28 to $29 M in revenue for 2014.
So, backing out the one time revenue of $8.5 M from this customer that is cancelling, this
leaves us with approximately $20 M in estimated recurring revenue for 2015 and beyond
(Note: I'm not factoring in new customer growth at this point).
$5.8 M in lost revenue, represents about 25% to 30% of the estimated total $20 M of recurring revenue; and sure enough, this same percentage, roughly 25% to 30%, is also how much the stock price fell today. Therefore the market has quickly repriced SY-V to account for this lost revenue.
Based on my quick and dirty analysis, as outlined above, I don't see a need to sell my position at 31 cents, as the stock price seems to have fallen by an equivalent percentage to the lost revenue,,, thus, unless new information comes along that Symbility's solution is no longer sellable, then I should think the stock price will probably base around 31 or 32 cents, until such time that Symbility can prove to the market that it can continue to win new customers.
Kind of sucks for those of you, like myself, who have an average price in the low 40s... but looking forward, I think any continued downside movement in the stock price will be fairly minimal.
Happy New Year to all, and hope that 2014 is good to you!