FINALLY - Phased Array Antenna will be for sale shortly I had signed up fro C-COM news. This morning in my email I received a number of product announcements. It seemed, at first, to be a collection of some updated versions of their existing products.
I almost closed the email but I decided to continue to scroll to the end and FINALLY there it was, the Phased Array Antenna with an official name,
iNetVu® iNmotion Ka-band ESA 1K
It also provided some technical details,
Supports GEO, LEO, MEO Constellations • Ka-band Frequency: Transmit: 27.5-30.0 GHz Receive: 17.7-20.2 GHz • Electronic Beam Steering and Tracking • Elevation Angles: 20-90 deg; (70deg from Boresight) with scan loss up to 5dB • Azimuth Angles: 360 deg Continuous • Polarization: Software switchable, Linear (H/V) or CP (RH/LH)
It is labelled "Coming Soon"...
There is also a link for "Additional Information" that takes you to
https://www.c-comsat.com/wp-content/uploads/2024/01/ESA-Antenna.pdf
There are 2 models listed on with 1024 elements (1k) and another with 4096 elements (4k), the number of elements relates to the connections to the satellite and therefore determines the data throughput.
It is exciting to see that the long awaited phased array antenna now has a name, shows 2 different models and also has some marketing collateral.
I had read another post that was critical of the importance of this product and doubting CMI's ability to transform the antenna market being such a small company. Some parts of me agrees with this when StarLink has has a phased array antenna in market for quite some time.
Where I disagree is that CMI's array antenna is not me to "revolutionize" the market, it is meant to be another antenna alternative for use with many satellite constallations, GEO, MEO and for me (most importantly) Low Earth Orbit "LEO" satellite constallations including StarLink / Amazon Kupier etc that are revolutioning / bringing in a reniasance of satellite communications.
Financial Context for the iNetVu iNmotion antenna:
I think it is very important to have context for the potential financial / valuation impact that this can have on CMI.
Over the last three years CMI has produced revenues of 11.6M / 9.2M / 6.5M with 50% gross margins. In the past when I had spoken to Leslie Klein, he said that production of these products uses simple and widely available PCB manufacturing processes and suggested that Gross Margins on this product should be significantly higher than traditional volumes when volumes ramp up.
So if the product had 70% gross margins, every $1M of new revenue contributes 700k of gross margin. Because CMI already has broad global distribution relationships and its already profitable, there should not be a lot of new operating costs associated with the sale of these antenna is so gross margin contributions should have a heavy impact in net income and subsequently operating cash flow.
So, returning to the $1M of incremental sales, it will produce $700k in gross margin and perhaps $600k of pre-tax net income and $390k of after tax income (assuning a 35% corporate tax rate). The stock currently trades at 22x earnings. So, for every $1M in new revenue that leads to $390 of new after tax income times the 22x earning multiple is $8.58M of incremental market cap on a stock with a current market cap of $50M.
To conclude, regarding CMI's phased array antenna changing the global antenna market, I think REALLY misses the point. CMI will be one of many phased array antenna providers. They don't have to change the world they just have to participate in this new and rapidly growing market.
The last piece of the puzzle I would like to see is the pricing / unit. Then we could get a sense of how quickly revenue can ramp up. Regardless, this is an already profitable company with existing global distribution and satellite operator relationships that is VERY highly leveraged to new revenue / earnings.
We are creeping to the finish line but it seems with todays announcement that we are FINALLY getting close the phased array antenna starting to generate important new, high margin revenues that should transform CMI's share value.