Syncordia Technologies SYTHF

The Worst is Now Behind Us. Back to QoQ Growth Next Q…

[93Darkhorse93]

Keep in mind that these numbers were for the seasonally weak period for Syncordia and reflect the business from where it was 4 months ago.  Everyone knew this Q was going to be terrible but an 80% drop in the share price was greatly overdone given that revenue only declined 25% QoQ into a seasonally weak period so the real number may only be closer to 15%-20%.  Operationally the business is doing just fine and revenue, EBITDA and Cashflow should begin to ramp again next Q as the REACH revenues return and the inherent organic growth of the business is shown from recent contract wins and Billing Solutions acquisition starts to be fully integrated.
 
 
I was still impressed with the revenue figure of 2.92 given that there was zero REACH contract revenue and Billings Solutions was just acquired at Q end. Now that the cost structure is under control with Opex settling around the 2M mark as revenue ramps this year more money should flow down the income statement.  This is reinforced by management being ahead of their target Cost per Claim goal they set out at the end of last year so operationally they continue to execute.
 
 
Even looking at the KPIs which are little difficult to compare QoQ because of weak Q4 seasonality the business continues to grow once you ex out the REACH contract.  With Paragon up 8%, AIR and Ground essentially flat with weak seasonality on top of that. Not to mention the Billings Solutions which is an entirely brand new revenue stream that will double revenues and add another platform/vertical to target for future growth and will be a bigger contributor than REACH ever could be. Add the fact they have signed a REACH extension combined with multiple ground, air and mental health contracts since YE these KPI numbers will accelerate rapidly into the next quarter.
 
 
Clearly the bottom is in.  Revenue growth will ramp organically and through acquisition of Billings Solutions.  If this was the worst case scenario of weak seasonality and no REACH revenue and just the beginnings of Billings Solutions was an EBITDA loss of only 120K the future is so bright.  Stock prices are forward looking not backward, as the QoQ growth should start next Q the stock should move appreciably higher as revenue growth could doubling YoY by the time we start lapping Q3, Q4.   I stick to my thesis that the stock was hit more than twice as hard as it should it been and should trade closer to 1.0 SP closer to a basement level 1x sales figure at the minimum.  I will be buying weakness or strength in the share price as I believe the path back to profitability has been laid out.
 
LONG getting LONGER