Post by
Captain71 on Dec 30, 2020 11:51am
Q4 expectations
Here is what I think we need to see in Q4 report for Investors to be confident that the company will get through these hard times and that increased revenue and earnings are just around the corner.
Although the pandemic was still in full swing in fiscal Q4 (ending sept/20), the company needs to show some improvement as a few things started to open up. Q3 with the lockdowns and order cancellations needs to be the worst.
Minimizing cash burn is at the top of the list. Be great if they can end the year with at least 3.4 million (0.06 cents) cash on the balance sheet. Net loss needs to be no more than 0.4 million to achieve that. Hopefully expenses were tightened a little but still probably going to need revenue north of 1.2 million to get that. If the company can at least achieve these numbers it will prove to investors they can get through the pandemic with a healthy balance sheet. SP will then likely trade at 1.5 – 2 times revenue per share plus cash on the balance sheet (+/- 0.10 ).
Fiscal Q1 report is then just around the corner, so the tone of Q4 report needs to be positive, with indications that they expect increases sales for fiscal Q1 2021 and going forward. This will have an influence on the share price, as will any update on tariff negotiations.
I realize this does not sound very optimistic, but in the midst of a pandemic we need to be real. Any improvement on these numbers will certainly increase investor confidence. Remember back in Q1 before the pandemic hit, earnings were positive, and investors are aware this is highly likely once again after things settle down, even more so if Tariffs are reduced.
Many small companies will probably not survive this pandemic and the new normal. Investors are looking for ones that have the ability to do so and potential for increased revenue and earnings.
This is my opinion only and may not represent that of other investors, nor is it investment advice. Disclosure: Shareholder and long.
GLTA