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When you look at the pace of revenue growth, earnings growth, and balance sheet improvement over the last 5 years and extend that same sort of performance forward for several years it really makes today's valuation seem silly. As the CEO said, VirTra is at least a "20% grower", +20% for 5 years gets one to about 40 - 45mil in revenue in FY21 and net income of about 7 to 8 cents per share.
It is also pretty easy to put together a case for why the next 5 years will show even more growth than the previous 5 so I believe 20% might be conservative.
This is why I believe the only objective of any investor right now is to buy all the shares they can regardless of price as there is no practical difference between a price of 15 cents or 30 cents at this point.
VTSI right now reminds me of another tiny company I worked with back in the early/mid 1990s called Stratasys. When they were about $15mil in sales they came in and gave their pitch and pushed their stock a bit. I bought some but figured by that point everyone in the world knew about them. I had it exactly backward, no one knew about them. I gave up on the stock a year or so later for a small gain only to watch it go up and up and up over the following years. Could have made 30X my money instead of +30%. All of us here are very familiar with VirTra and VTSI but I guarantee it is an unknown company and unknown stock. That will change. The steps are in progress.
Again today, the single seller would appear to want out more than the couple little buyers want in. I added my weekly shares today at .21 and the seller came to me each time and I could have probably even gotten them a bit cheaper but in my world, 20 cents is no different than 15 cents or 25cents. The name of the game at this point is to get yourself as big a piece of the company that you can afford.
Enterprise value at 20 cents is a hair under $28million. That is far too cheap for how VirTra has performed and will continue to perform.
Spent a couple minutes at the VirTra website last evening. Lots of events coming up over the next month. Shareholder meeting next Friday and then some decent sized conferences/coventions/demos in early October. Lots of visibility coming VirTra's way.
Gander Mountain was the WORST FIT IMAGINABLE for VirTra and their systems. It never had a chance because that effort was initiated by poor thinking on both sides of the deal.
GM is in business for only 1 reason and that is to sell guns. They carry a ton of other stuff and have big beautiful stores that hunters and fishermen and sports people love, BUT they make ALL of their money by selling guns. GM (wrongly) believed that having VirTra systems in their stores would boost gun sales. No way would that ever ever happen. GMs are (mostly) located where everyone can easily go shoot real guns. VirTra systems don't have options for shotguns and rifles and bolts and pumps and 22s and 300 ultra mags and and and. If I go to the local GM to buy a gun, we take it off the shelf, walk out the back of the store, and shoot it.
VirTra thought the deal would work for them due to the explosion in concealed carry classes and education and getting local police to use the facilities to train. Not a bad thought but it didn't matter because after 6 or 8 months it was clear to GM that gun sales were not benefitting.
I applaud the fact both companies tried it, but they should have been smarter.
Modern Round has a chance to be multiples bigger and more important to VirTra than GM ever could have been. Let's say MR is a success, look what might be in place in 6 or 7 years.....25 worldwide locations and royalty stream to VirTra of $3 or $4million per year. And oh yea, they also got upfront system sales of $40million over those several years.
I still haven't a clue whether Mod Rnd will work out, but it has a chance and as far as VTSI goes, it is simply frosting on an already delicious cake.
I did say I was guessing. I sort of base it on what the average "successful" US sit-down chain restaurant makes in a year. Most are about $2 - $3mil in revenue so I figure with Mod Round's higher initial costs and higher ongoing operating costs they need to have a much higher per store revenue.
Not sure what the labor laws are in AZ, but here in WIS you only have to pay waiters/waitresses/servers about $2.30/hour and that is what most decent-to-better restaurants actually do. The biggest part of their compensation is tips. So even if MR has 120 employees, the majority of them are part-timers and low wage servers. At least that is my guess.
145k in revenue over 20 days would be about $7000 per day or about $2.6million per year. But given the timing (the month) of the opening, I would guess they will do about $4 - $6mil in revenue for a full year but that is a wild guess. Another guess is that I bet they need to do over $5mil a year to make any money.
I wish I could meet you at the shareholder meeting but I cannot attend. (I recall an earlier post where you said you would be attending.)
A couple days ago I sent VTSI finprofiles IR and Mr. Ferris several questions to address during the annual meeting. Most are obvious ones that I would hope get submitted by many people, however, I did not want to leave it to chance.
I always wonder when people sell a stock as to what perceived better use are they putting the money. If the VTSI seller is moving money to some other investment, I would sure like to hear the rationale. Or maybe they have some sort of expense they need to pay or whatever.
I really think the next 18 - 24 months are going to provide the best shareholder returns ever in the history of the company.
I do own quite a few shares and will keep adding every week as long as the stock remains so low. I firmly believe the correct value of the company TODAY is about 3X the current price and then when you throw in the fact it is growing at 20 - 25% per year it makes for a compelling buy.
Sort of interesting today. I bought 17,500 shares today at .2101 sort of as an experiment.
There is a bid of about 115,000 shares at .2100 and the ask has been 2500 at .2101. So I was wondering how many shares someone really would be willing to give up at .2101 so I nibbled.
Seems to me this must be a computer somewhere because if a person was behind it then they would simply sell to the bidder at .2100. If this persists, I will nibble more later in 10k blocks to see how many the computer is willing to lose at .2101. I must be bored today.
Nope, haven't lost me. I continue to add shares. I just got angry with some of my posts being deleted.
I started building a position over the last couple weeks. Slow going but getting shares. Still an active seller. PS too low and forward prospects look ok. I like that the CEO is focusing on the core of the company.
Twister, You say "....Everything else bleak for now!"
If this is what bleak looks like for VirTra and VTSI then please give me double servings of bleak as it is one of my favorite dishes.
Your bleak is my filet mignon. For example:
Through 6 months of FY16, VirTra has already matched full year revenue for all of 2014.
Trailing 12 month EPS is about 2.5cents per share and that is true GAAP net income.
Net cash on the balance sheet has trended up and up over the last few years and is now greater than $4million. Company has no debt.
You can buy a few VTSI shares for 22 cents which is a sub10 PE and a PS of a little over 2.
The first Modern Round is up and running and sites 2 and 3 and 4 are in the early stages. Modern Round might actually succeed. Frosting on the cake.
Then there is always the going forward $40mil chunk of business they are likely to get a big piece of over the next several years.
Oops, forgot about ISO and those doors opening.
Rats, forgot about the recent shareholder letter and upcoming annual meeting to be webcast.
Ok, I will stop for now. Well, not quite yet. Why do people care about a few penny move in stock price when the volume is about zero. Total dollar value today was less than $65,000. And you seem to say it will be sad for VTSI to lose the penny stock players. That would be the best thing ever if you ask me.
Adios
I don't think there is any doubt about VirTra continuing to grow. It is a big world with a ton of police departments, private security, government orgs, border patrols, etc. Also a big world for Modern Round to conquer and a royalty stream for VirTra that could be as much as 3 or 4 cents per share in several years. Thanks for congrats on stri, that one trades really weird so sort of unpredictable. IHUB has deleted several of my recent posts and I am just about ready to leave IHUB for good. They should be much more concerned with the sort of nonsense that several others post.
The company and the stock are clearly going in the right direction and within several months the stock will catch up with the company.
Go ahead and buy a tiny order of 100k shares and the share price will magically be over 24cents. Try to buy 300k in the last hour today and the stock will be at 52 week high. My only point is there is no volume so these prices are meaningless. I added 46k shares a couple days ago when I saw someone listing them at an ask of .233. How silly.
ISO started in Europe and is still the strongest and most common in Europe (many countries) so my guess is Europe.
For those who have never been in an organization seeking out and pursuing ISO cert, it is an expensive, painful, cumbersome process. These expenses were likely incurred by VirTra over the last 18 months or so. Going forward, all they will have are the annual maintenance sort of fees. This bodes well for forward margins. Also opens the door to many more European and Mid-East sales.
This ISO cert is yet another reason (on top of about 17 other reasons) why it is likely that forward profit margins and revenue growth will be even better than the already great trailing numbers.
For those unfamiliar with the many different classes of ISO certs, the one VirTra sought and obtained is at the top.
I sort of doubt it. There is too much going on and the valuation is too compelling for it to sit here for a long time.
It is very difficult to find comparable stocks to buy. By comparable I mean....growing revenue, growing earnings, no debt, growing cash, PE sub 10, PS sub 2, EV/EBITDA sub 5.
About the only other one is NAII. It is actually experiencing even faster earnings growth but its multi-year trailing record of performance is not nearly as consistent as VTSI. There are also stocks out there trading for far less than actual cash on the balance sheet (like STRI),however it is usually because the core business is ugly and in decline (like STRI).
On days like today when VTSI volume is essentially zero, the closing (or opening or during the day) share price is meaningless. At today's close, the Enterprise Value (Market Cap less net cash) is a hair under $30mil. Would it be possible to buy the entire company for $30mil? Of course not. If you did own 100% of the company, what would it be worth as a passive investment based ONLY on its FY16 net income? A lot more than $30million and that ignores a ton of other factors that add to the value.
I attended in 2010 and 2013. Perhaps they seated you in the wrong room? But whatever, doesn't matter.
I am more concerned by you saying that my estimates and valuations are "wild and optimistic" and filled with "misinformation."
I have been very consistent in what I have been saying. Please give me one example of a "wild" or "optimistic" valuation or estimate or example of misinformation from any of my posts.
VTSI is currently trading at a PE of 10.
VTSI is currently trading at a PS of about 2.2.
VTSI is currently trading at an EV/EBITDA of 4.7.
These are all based on actual reported trailing 12 month numbers.
Overall market PE is about 18.
Overall market growth rate is about 6%.
Taser is valued at a PS of 60.
Taser is valued at a PS of 6.
VirTra is a proven 20%+ grower in terms of both revenue and EPS. It has been going on for almost a decade now. VirTra has performed far better than market and better than their peers.
Clearly VTSI deserves a PE of 25 (taking into account their balance sheet and enterprise value in addition to all else.)
Clearly VTSI deserves a PS on par with companies like Taser. If VirTra were selling some impossible to trace widgets to unknown customers then I would penalize them for being a pink sheet stock. However, VirTra sells large easy to verify systems that are almost all in the public domain to customers that are the best in the world in terms of visibility and ability to pay - municipalities, fed gov, polic depts., etc. If anything, VirTra has more credibility than most other companies.
Current FY2016 is now half over. VirTra has $9.6mil in revenue and EPS of almost 2 cents through these 6 months. I fully expect them to come in at between $17 and $20mil and 3 to 3.5cents for this full year 2016. I don't see how anyone can call this wild or optimistic. What are your estimates? 3cents x 25 = share price of 75cents. Use PS and EV and you get about 60cents.
Again, give me ONE example of what you find so offensive in my estimates.
Neither you Bill nor Twister is correct. With VTSI shareholders like you guys, who needs enemies/shorts.
EVERY SINGLE QUESTION that has been asked in EVERY SINGLE SHAREHOLDER meeting ever held by Ferris/VirTra has been answered. That said, very very few questions have ever been asked. It takes guts to raise one's hand, stand up, and ask a decent question. Most shareholders don't have the stones for it.
This shareholder meeting is very different. First, VirTra has invited shareholders to submit questions ahead of time. Second, VirTra has committed to answer them during the meeting. Third and very unusual for any company, VirTra is going to webcast the meeting for all of us to watch realtime. That is almost unheard of in the world of public companies.
Bill, your question about uplisting is a good one. Ask it and it will be answered. Don't assume someone else will ask it. The answer though is that obviously the process has already started. It started with the move to Nevada law and the assurance that everything passes at this meeting since it is now guaranteed. Those are the 1st steps in the process. I suspect that in relatively short order after Sept 16th or maybe even after the votes are officially/ceremonially counted/certified during the meeting Ferris will lay out the detailed plan for all of us.
Ferris deserves respect and patience as he has earned it by growing this company from nothing to $20mil revenue and a $40mil market cap and a clear path to $50mil/$200mil in relatively short order.
Any ISO pain is usually self-inflicted. So many companies come up with complicated, extraordinarily detailed procedures when the exact opposite approach is what should be done if the goal is simply to obtain and maintain ISO without bankrupting oneself.
One can almost (but not quite) get by by saying our procedure and docs are "not to have any."
ISO is as big a fraud and waste of money (though I admit it is necessary to do business in many countries and with some orgs) as climate change and obummercare and any other big government sort of thing.
Ok, I will backpeddle on my earlier Twister criticism. If Bill is ok with Twister than so am I, not that anyone cares - and no one should.
Yea but Bill, you are a likable guy who I am 99.99% certain owns shares of VTSI and wants the stock to go up. I am not so sure what the other guy's motives really are? Perhaps try to get weak hands to sell to him. Perhaps short. Perhaps a former employee. Perhaps with a competitor. Maybe something personal between him and VirTra?
I don't have any issues with people posting who are negative about the company or the stock or the forward prospects AS LONG AS THEY STATE why they care. If they care because they are short the stock, wonderful, at least we know. When these sorts of people avoid answering the "why" question, then I have a problem and will fling a few arrows back their way.
I really wish all these sorts of message boards were not anonymous.
Twister, All you do is throw mud in every direction and hope it sticks somewhere. The entire point of Modern Round is for people to shoot "real" guns not play with or mess around with controllers. And even bringing up Modern Round is sort of silly as it is such a tiny part of what VirTra is doing and what they are all about.
But continue slinging. At least you are relatively creative.
Sounds like a good question for the shareholder meeting.
A very nice quarter! I happened to be off-grid in N. Wis the last couple days many miles from cell phone coverage and just returned home.
In many cases companies mis-use the term nonrecurring expense. In this case, the $400k really is a nonrecurring expense so legit to mention it and good they mentioned it.
Profits (bottom line net income) really do seem to be strengthening. $500k on $3.4mil is a bottom line net income that is 14.7% of revenue. Super healthy. The net cash generation is also extremely healthy.
EPS through Q1 and Q2 is now pushing 2 cents. Falls just a bit short of 2 cents. Seems likely the FY will finish with EPS above 3 cents and maybe as high as 3.5cents.
With this sort of continued strong performance, the company will eventually get their PE of 25 or 30. Sept 16th is going to be big! Webcast! questions! presentation!
Only sad thing for me is I missed a chance to buy a few more shares but with volume of only 600k none were really available. It would seem the holders are starting to pay attention and get smarter.
Good question Schneidku. My guess is VirTra has some sort of in-house modelshop/prototypeshop/workshop or that sort of thing. Probably equipped with the basics so they can do at least a few things in house on their own schedule. I could envision them needing to make some custom brackets or slides for screens or even some custom/prototype parts for some the accessories.
Each of the 3 companies I worked at had this sort of capability and a couple of them you really wouldn't have expected to have it but they all did make sense.
bill, I don't recommend buying this (though I did buy some today) but if you really want a head scratcher in terms of valuation, take a look at STRI. Trades for far less than actual cash and while their business is currently crummy it isn't that terrible.
I agree with you about 2000%. Even at my age the 2 people in my life who I spent the most time with in a boat (fishing) have already died....both in their 60s. Each school year literally flies by for our family and my oldest just got her drivers license last week. About all this stock stuff is really good for is that it is interesting and fascinating and fun to discuss. The coming months should be loaded with interesting VTSI stuff.
Excellent! Monday morning it is. Even though we are all looking forward to another good report, in the long run it doesn't much matter because it is just one in a series of about 20+ upcoming great reports. Then consider the shareholder meeting in only 1 month THAT WILL BE BROADCAST over the web and in which they will answer questions and submitted questions....and all in the face of the recent shareholder letter. Sort of tough not to feel really good about things.
My guess is the proposal will be a 1 for 100 reverse split which will put outstanding shares at about 10million after the upcoming dilution.
STRI is so undervalued as to be beyond silly. CEO/BOD should immediately sell the company or even simply dissolve the company and payout all the balance sheet cash to shareholders. Pretty crazy to be selling for sub.1 PS and EV/EBITDA of about 0.2. This EV/EBITDA is about 20 or 30X lower than where it should be. I was happy to be able to add some shares today.
Only because that way maybe they will be remembered for a full week. In reality, it makes no difference as to when.
And then look at TASR and compare all the ratios and performance to VTSI.
I will just cherry pick a few, TASR has a PS of 7, a forward PE of 65, and net profit margin of a little less than 7%.
VirTra is growing faster, is far more profitable, and has a comparable balance sheet yet PS is 2.x, trailing PE is sub 8 and forward PE is about 5 or 6, net profit margin is about 15%.
If the execs at Taser were savvy, they would use their richly priced shares to buy VirTra. It would be instantly accretive and provide them with a higher profit margin growth business that is complementary to their other businesses.
Of course, maybe in 2 or 3 years, VirTra will be able to use their overpriced (I pray for the day) VTSI shares to buy Taser. Stranger things have happened.
I just spent a few minutes sniffing around the VirTra website. If you want to feel really good about the company and increase your confidence that the revenue growth will continue just click on Careers. Wow! Clearly the company will continue to grow. I am also pretty happy to see several sort of non-typical/specialized jobs posted such as the actor/video/scenario and military sort of stuff. Tells me there really are some decent barriers to entry and specialized/proprietary knowledge that would be difficult for a start-up to replicate without spending a ton o money and time.
I am now in the camp of hoping for a Monday morning Q2 earnings release rather than Friday morning.
I bought a few shares on Monday and Tuesday this week but there just are very few available sub-25cents.
weo, I have also had several posts deleted and not sure why. With respect to VTSI and your post questioning whether someone is an insider - I have read about every post on this message board and have to read ANY that have any sort of "inside" info. Between the recent proxy and their SEC filings and press releases and public government contracts I would venture to say that EVERYTHING about VirTra is already in the public domain.
If you could, give one example of something someone said here that could be interpreted as inside info. Thank you.
That does fit with the type of selling we have seen, 5000 shares here, 10,000 shares there. All very small orders and mostly at the market sells.
I have never been more optimistic or excited than I am now about owning VTSI. Even though the stock has gone up a bit, it is far better underpinned and supported by trailing performance (revenue, EPS, balance sheet) now than at any other time in its past. In similar fashion, looking forward has never presented as bright and clear a picture as now. Demand for product driven by world conditions, Modern Round looking promising, $40mil win in their pocket, proven ability to grow profitably, stated plan and execution underway to uplist and improve shareholder value and liquidity, and on and on.
They always announce in the morning before market open so I would expect either Friday morning or Monday morning. My guess is Friday morning though it makes no difference.
Your 25k purchase will turn out just fine. Reread the shareholder letter, then turn off your computer for about 6 months. Those 25k shares will be worth about $15,000 or $20,000 in less than 1 year. At least I hope so.
It's not like we are asking for any sort of miracle growth or valuation. Simply give VTSI a PE equal to their growth rate or even the overall stock market PE. Or give VTSI a PS in line with a company like Taser (even though VTSI is growing faster and more profitably). Or simply say VTSI deserves the same sort of EV/EBITDA as the rest of the market or one in line with a take out.
No matter how you slice it, VTSI is worth far more than the current share price.
Exactly right, that is why I am hoping for a certain number and not predicting a certain number. Predicting any single quarter is a fools game. Predicting a full fiscal year can be done.
The trend over the last 7 or 8 years is crystal clear. The acceleration over the last couple years is also clear.
And then there is this. Does anyone really think VirTra would go to the trouble of becoming a Nevada corp, splitting their stock, and uplisting if the current situation and immediate future wasn't so bright that you gotta wear shades?
You have been around on IHUB much longer than me. Why would they delete those posts? No bad language, no name calling, politics obviously is a big factor for stocks, so I don't get it. Probably enough to make me never use IHUB again.
You are sure a glass half empty sort of chap.
My revenue and earnings estimates are very realistic. Look at revenue in 2014 (9.9mil), revenue in 2015 (13.5mil), revenue through the first 6 months of 2016 (about 10mil). They are clearly on pace for 2016 to come in at 18 - 20million or better. It doesn't take much of a leap of faith to see 25mil in 2017. That is only 20% growth which they have achieved consistently for the last decade.
Trailing EPS is already about 2.5cents, so again not to much of a leap to see that double with double the revenue.
You mention "refuse to provide the cost to use or revenue gained if any from/for the 20 systems installed at Modern Round." Exactly who have they refused to tell? Did you ask? Did I ask? That revenue is lumped in with all the other revenue in every quarterly report. Why should they break it out? They shouldn't as it would be a bit too helpful to competition.
The company has audited financials from a big league public accounting firm. Every one of their customers is in the public domain and sales/contracts easily verified as every municipality and state and fed agency puts this stuff out for bid. Again, easy to verify and more transparent than just about any other company.
"Straight up with shareholders". I have only been a shareholder since about 2009 but in that 7 years they have delivered everything promised and then some.
I hope you are right about the engineering genius and Donald ego as that would be an awesome combination! (yes, I vote Trump)