Vaso Corporation (VASO)

[OBrien]

The decline in GEHC deliveries along with the IT segment eating up profits has killed net income in recent quarters. I guess it comes down to if we can believe what management says..

Deferred commission revenue for GEHC sales is up 13% YOY so we should absolutely see a jump back up in sales of their most profitable segment over the next few quarters.

Pretty bullish language in the Q1 PR looking forward..

Deferred revenue remains substantial, at approximately $19.8 million as of March 31, 2017, which will be recognized in the future when the underlying equipment or services are delivered and accepted at the customer site.

This tells us their professional sales segment has not slowed at all but we need to see the deliveries pick up as this represents nearly $40Mil in revenue.

The healthcare IT VAR segment backlog is up to $8.3Mil. This segment only did $1.9Mil in sales in 2016 but as sales grow here margins should get better. Without going back and listening to the last CC I believe it was 60% of their customers in this segment are signing up for their subscription based services. This recurring revenue should boost margins but it may take a while as we should consider this segment still in a start up phase with a lot of resources being put in to it.

No reason the IT segment as a whole (including Netwolves) shouldn't do well over $40 Mil in sales this year and increase margins but bottom line is the company has to prove itself as many have given up after the last few disappointing quarters.

But to answer your question I do think $5Mil net income is possible however with the big loss in Q1 I doubt we see that for 2017.

In the .08s/.09s this is one I am being aggressive with as I'm only 50K shares away from a Mil shares so I guess you can take that as I believe good things are ahead :)