RE:RE:Houston - We Have Liftoff! LTE Rockets Up
Be honest. Are you upset because you don't own this stock yet or didn't own it earlier? Don't worry it's not too late.
Here's the data that I am seeing avaible I see over $8M in announced contracts over past 6 months $7.1M Haida Gwaii, $275K Trinidad & Tobago, $180K Washington (in USD) and $440K Delta and $132K UBC. Now we know that there is also Rossland and other projects ongoing according to the update. So it is not a stretch to say somewhere around $10M and the company is not even finished Q2 2016. There is clearly sales momentum with new partners, existing partners and new trial deployments. Let's say the company burns about $1.5M annually and has GM 35%. (Remember as a private company it was profitable on sales of $850K). The sector is hot due to the growth and commanding a high multiple, I have seen 30x earnings in some in the space. So 10M *0.35 =$3.5M. $3.5M -$1.5M is $2M in pre-tax income, and likely some credits etc., so not expecting a lot of taxes. 30 * $2M =$60M market cap. $60M/30MM shares = $2. Now build in some safety and be conservative and it is not a stretch to see where the company is valued today. Now, as most make projections... assume they double sales over the next 6 months and you now have $5.5M in pre-tax income. Apply same metrics and you have a +$5 stock assuming no dilution over that time.
Use whatever metrics you want, but all I am suggesting is the company actually seems fairly valued here and not a mystery as to where it is trading now. Where the SP could be much higher is if you assume that they even get one more Haida Gwaii-like build over the next 6 months which I don't think is unreasonable given what is going on in the industry. And what if this company gets even 10% of the $1B build in Vancouver? Or Edmonton? that was announced by Telus. Oh yeah, this company successfully completed the trial for Telus and is an approved vendor for Telus (and Bell by the way, and aren't they doing a $1.4B build in Toronto). Lots of blue sky here. This company has proven product and proven sales with Telcos. This is not a concept story.