Expectations have been taken so far down your estimates in the 60-70M range which I think is achievable, however analysts are only looking for 53M in Q4 and about 2% QoQ growth in 2017. The stock would explode if they actually hit your 70M Q4 number.
So if I say they can generate revenue growth 5% QoQ (57M) for this just past Q4 and into FY-17 analyst are way behind what they could generate as analysts are only at 230M for FY-17 which only works out to 2% QoQ revenue growth which is way too low.
It’s all about controlling costs which has been known since the oversized acquisition in hindsight was too big with too much debt for Matt Davey to take on given that NYX was still trying to establish its own business model at the time, but that’s just my opinion. If they are able to get Admin and Personnel costs down to the 30% and 40% of revenues relative to past Q3 of 32.88% and 44.96% respectively this will drive significant EBITDA and EPS growth.
This cost control could get EBITDA margins at 30% with upside potential generating 75-80M range in 2017. This would put it on only a EBITDA multiple of 1.6x-1.7x, which I find ridiculous. Granted if you adjust for enterprise value the multiple goes up a couple points but still way too low.
Time will tell, multi-bagger if Matt Davey can execute but the debt load will keep a lot of people hesitant. Loaded up in the name in my mad money allocation but I like it a 2/share so I have to love it down here. Especially given the number of invested parties that already have significant stakes in NYX Gaming that it is too valuable to let drop much lower.
LONG