Urthecast Corp T.UR

RE:Wow :)

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Haven't had a second read of press release or listen to the cc, but here are some things that I took out of my first run through each.

1) Revenues much more than expected.  This is obviously great news.

2) Backlog of $100M + $30M of options.  On the call they mentioned some of this is longer term (out 3 years or so).  In my mind there is probably 50/30/20 split between 12/24/36+ month's timeframe.  This gives us a base of $50M revenue over next 12 months even if the sales team does not do another thing.  This isn't even with HRC at FOC.  Deimos customers probably not all targeted for additional selling opportunities yet either.  On the call they hinted that they have had very promising discussions with the NGA - a DGI customer.  Would be huge to get in with them (Thanks Tish!!).  I'm guessing 2016 revenues could top $100M with 2017 & 2018 seeing moderate growth - maybe getting to $150M by '18.  

3) Tone of call was the complete opposite of DGI - nothing but positive discussions with customers, huge demand, UR in great position to capitalize, etc...

4) HUGE NEWS that the're pushing aside GEN 2 sensors so they can push forward the constellation.  This decision would only have been made if numbers showed it to be a no-brainer.  A lot of progress had been made on Gen 2 equipment.  Love the fact management is willing to change direction like that.  The Board, the Advisory Board and the Larsons just became more impressive in my mind.  Too many times mgmt are blind to market forces and actually work against them because of their stubborness.  

5)  Additional MOU for another $175M for constellation only indicates how much demand there is for that product.  2 Customers have "committed" $370+ million for something that is 3-4 years out!  In addition, it sounds like the folks UR talked to regarding HRC, Deimos and even Gen 2 product were going all ga-ga over the possibilities with the constellation.  Any further significant news releases will be about more constellation MOUs.  If we can assume the money has been offered up by 2 different countries think of how many more will do the same. I wouldn't be surprised to see them reach $1B+ in MOUs by the time they launch.  With the amount of data the satellites will provide and the likelihood of increased geo-political issues 3 to 5 years from now, what amounts to real-time satellite coverage of your own country, won't just be a nice-to-have it will be a MUST HAVE!!

6) With Gen 2 pushed aside for now capex will be much lower.  UR will be cash flow positive from operations from this point forward and with 3rd parties funding the substantial portion of constellation there will be no need to take on any debt or dilute our holdings with any further share issuances.  Larson eluded to that on the call too.

7)  Lack of press releases in the future may still provide some frustration for some of us.

I'm sure there's more that will come to me as i sift through the info a second time, but it was a sneaky great release and call from my perspective.

As for share price...  Short term, i don't even want to try and predict.  We could go higher in the morning.  I also see a scenario where people react initially to the meaningless bottom line of this quarter and decide to sell putting us back into the $2 range.  If analyst reports come out with little change to forecasts I see us hovering in the $2-$3 range until Q1, maybe even Q2 next year.  One of the Larsons mentioned winter time provides additional cloud cover in most regions, resulting in less saleable inventory.  If analyst alter their estimates to the upside I think we'll get to the $3 - $3.50 range in the coming weeks, staying there until next summer.  

LONG TERM is what matters to me.  I'm more sold on the long-term possibilities now then ever before.  I see this becoming a $2B to $3B company once constellations are successfully launched.  That puts sp at around $20-$30 by 2020.  With significant jumps along the way coinciding with news regarding successful launches etc...  I'm happy parking my money for 5 years for that kind of return.

I hope i'm wrong on the shorter term action.  It would be nice to see a bump back up to $5, but I'm not going to get too hung up on daily swings.

GLTAL!!