Can someone explain to me why this stock is only $0.20?
Okay, so after two quarters the company currently has a $60 million run rate for the year. I’ve look through the news releases and the year end and Q1 financials. The company had a record Q1 revenue of $19 million, up 2253% from the previous year. The company is completely debt free and has over $10 million or so in the bank. Yet the stock price dumped not long after this record announcement. I realize the devil was in the details as their AI revenue was down and the AI being the main focus of the company, but being debt free and having that much money banked will allow options for this company to expand fairly rapidly and to chase down larger and larger contracts in regards to their AI, hence the recent bid of $40 million mentioned. It will also help expand their medical side very rapidly too.
Covid contracts are going to continue with the Delta variant and other variants that will inevitably emerge. We will definitely be testing for covid for quite some time, at least to the end of 2022 with the current situation, but most likely to 2024 and beyond IMHO if we want to keep the world economy going.
The company currently has a run rate of $60 million for the year! Some of the Covid testing may drop a bit here and there, but recover as companies realize this will be the price to pay to safely remain open and operational and the AI will likely begin to increase each quarter. So even if we say a run rate closer to $40 million for the year to be more conservative and give it a 10x earnings for a $400 million market cap, then the stock price would be sitting around ($400 million divided by 355.17 shares out) a share price of $1.12!!! Even if we take half of that by giving it a 5x earnings or give it a $30 million total revenues at the end of the year, which is what the stock is already at with a10x market cap we still get a share price of $0.62.
So unless I’m missing something this stock is extremely undervalued at its current price. This stock is currently sitting at only a 2.3x earnings market cap. This is definitely the type of stock I’m always looking to find and invest in. The management seems pretty solid and dedicated to the success of this company which is also another major thing I look for. Wasn't the CEO in talks with a number of institutions recently?
Anything else that I’m missing or assumptions that I’ve made that are questionable? Would like to hear from some longer term investors that certainly know this company better than I.