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Siyata Mobile Accelerating Growth on Multiple Fronts

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2 Comments| September 29, 2021

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Expands its Global Footprint with Multiple New Contracts and a Key E-Commerce Distribution Agreement and Launches Innovative New Product

Focusing on one specific niche market has long been a proven path to success. It’s also a potential road to failure if you choose the wrong niche. Siyata Mobile Inc. (NASDAQ: SYTA) appears to be in the winner’s column. Its push-to-talk over cellular (PoC) devices are rapidly gaining in popularity in the North American first responder market but this innovative company also has a strong global footprint, having been qualified with major carriers, not only in North America but also in international markets as well. Finally, an exciting new product announcement appears to be a game-changer and will bring another product category from this company into North America.

This was a calculated move. While issues with materials availability, distribution networks, and government instability have caused many firms to rethink their global growth strategies, Siyata has gone in the other direction. Its aggressive international marketing recently landed the company three new contracts, significantly expanding its global footprint.

Siyata’s mission is to effect a generational change from the traditional land mobile radios (LMRs) used in commercial and emergency vehicles to the more effective and reliable PoC devices that it specializes in. The United States supports that effort with FirstNet, a broadband LTE network developed after 9/11, which is managed by AT&T (NYSE: T). Other nations are following suit.

Middle Eastern Distributor Invests in Siyata Fleet Solutions

While conflicts in Iraq and Syria may dominate world headlines, the Gulf Cooperation Council (GCC) countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) have an advanced 4G/LTE communication network and are projected to have 62 million 5G mobile subscribers by 2026. Siyata has a strong foothold in this growing market.

Earlier this month, a large-scale Middle Eastern distributor of fleet communications devices submitted a $400,000 purchase order with Siyata for its UR7 rugged smartphones and CP250 all-in-one tablet-style communications devices. These hardware solutions are expected to be used widely in taxis and delivery vehicles. The CP250 also offers navigation and video call capability.

Multinational Defense Contractor Places $530K Order

Middle eastern distribution isn’t the only international contract Siyata has secured in the past few months. Back in August, an international defense contractor submitted a purchase order for $530,000 to buy Siyata’s push-to-talk (PTT) rugged handsets and UV350 commercial vehicle devices. The deal was due in part to Siyata’s success in the first responder space.

"We look forward to filling this order for the defense contractor after completing several trials of our rugged PTT handsets and UV350 devices in the field,” said Marc Seelenfreund, CEO of Siyata. “Our core focus is to be the leading provider of PTT mobile devices. We expect to receive additional orders from this contractor going forward.”

Silk Worldwide Signs Distribution Deal for Siyata Signal Boosters

Closer to home, Silk Worldwide Inc, the parent company of SignalBoosters.com, came onboard with Siyata in August by signing a reseller agreement to distribute Siyata’s line of cellular signal boosters. Silk brings its existing North American distribution network and an online marketing plan that includes posting on their site, as well as Walmart and Amazon. This agreement marks an important step in Siyata’s distribution strategy, which now covers two of the most popular e-commerce sites in the world.

Weak cellular signals dropped calls, and slow data feeds are common issues that can be solved with the state-of-the-art signal booster technology that Siyata has developed. The potential consumer market, in terms of population, numbers in the millions. The agreement should also give Siyata additional penetration into the commercial market for cellular signal boosters, a perfect complement to its existing channel relationships with North American and international carriers.

What the Analysts Have to Say About Siyata

Viewed from an anecdotal perspective, Siyata appears to be well on its way to a successful 2021 and an ever-increasing market share in PoC devices going forward. It’s also making inroads into the cellular booster space and expanding fleet services with its UV350 vehicle devices. Its target markets have been expanded with three diverse product lines.

On February 17, 2021, Siyata's share prices peaked for the year at $14.81. It’s fallen since then, but market experts from both the Maxim Group and Zacks Small-Cap Research agree that the company is currently undervalued. Their most recent reports, published in July before the new distribution and resale agreements, have it valued at $16.00-$17.00 per share.

From Zacks Small-Cap Research

Zacks initial coverage of Siyata Mobile set the target valuation at $16.00 per share. That’s based on current sales numbers and future estimates, with a 2.9x multiplier attached, which is the industry average for EV/Sales. The report points out that Siyata is a niche player in the PoC handsets with “Sales growth catalysts include its flagship in-vehicle device for first responders, school buses and commercial vehicles, expanding cellular boosters sales opportunities and an upcoming new product.”

Zacks is predicting a tripling of revenue from cellular signal boosters, primarily coming from demand by U.S. outdoor workers and residential landline cutters. That number could be significantly higher with a growing e-commerce presence on SignalBoosters.com, Walmart, Amazon, and an upcoming new product, which the company has since unveiled, a new Mission Critical Push-To-Talk (MCPTT) rugged device, the SD7.

“The SD7 is a perfect complement to our flagship Uniden® UV350 in-vehicle communication device and our portfolio of cellular boosters. As such, we are in discussion with multiple carriers to launch this device, and we expect first in North America in the second half of 2021 and then in Europe in 2022” said Seelenfreund.

Siyata’s sales growth is projected at 140% in 2021, with an additional 70% in 2022. Zacks mentions an enterprise customer contract in 2020 as a catalyst for this growth, but that does not include the newer updates we’ve included here.

Another component that seems to be missing from this report is the projected growth in international sales. Zacks focuses on the North American market, which is sure to drive growth for Siyata. The Middle Eastern contract was signed in September, two months after this report was released. Those numbers need to be factored in on the next update.

The estimate for EBITDA profitability will likely be modified since it's projecting profitability by 2022. Recent developments could accelerate that process and potentially driving share prices up. The stock price hit an all-time low of $3.70 this week. Don't expect it to stay there. It's already climbing again.

From the Maxim Group

A similar report from the Maxim Group, issued in July 2021, placed a 12-month target price of $17.00 on Siyata. The number was arrived at after factoring in a difficult 2020 followed by a strong financial report to end Q1 of 2021. Maxim mentions a strengthened sales team and increased demand in each of Siyata’s product categories as key drivers of revenue growth.

The Maxim Report highlights a $1.6 million deal signed in 2020, but it of course does not have the current projected sales numbers that will result from the Middle Eastern deal, sales to a multinational defense contractor, the new distribution agreement with Silk, or the pending launch of the SD7. The increased revenue from these contracts should modify the price estimate.

One of the variables Maxim analyzed is gross margin, which in this case is 43%, an increase of 1,100bps over their original estimate. That increased margin is due to an improved product mix and higher margin sales in the United States.

While the outlook was positive a few months ago, it should be even better as the fiscal year continues to unfold. Look for upgraded numbers from both Zacks and Maxim as Siyata continues to find accelerating traction in its core markets with its existing products and new opportunities with its new product launch. The price range of $16.00-$17.00 may turn out to be a conservative number. This is a company on the move with a big potential upside.


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Why is this not released as a press release ?
(70)
September 30, 2021

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