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What are your expectations for Q3 revenue and EPS?
The danger to Ferris and to VirTra and to long term VTSI shareholders is that someone (private company, public company, private equity, hedge fund, whatever) swoops in takes the company in a hostile fashion at (for example) $5 per share right now.
Ferris and insiders own much less than 50% of the shares so really very little control. The company has some valuable long term contracts and products with a competitive and profitable edge.
So even someone like me would probably vote "yes" to this sort of deal right now if it would close in a couple months. Taser could do it tomorrow and use zero cash, instead use their inflated stock.
This is what happens when ones mind is idle. Scary stuff.
There are simply no buyers. No bids anywhere and not many asks either.
About the only good thing is that VTSI is not alone in this respect. This is a weird market and has been for many months now. Small company and even some mid-size company stocks are being completely ignored. While the DOW is up big, it is driven by only a hand full of the stocks. Likewise for the S&P 500 and even the Russells to some extent.
There are truly some great buys out there right now for the patient value oriented stock picker. VTSI is one of them. Another is NAII.
Someone earlier mentioned the need for a pumper/cheerleader. Some truth to that. I would argue that Ferris needs to pick up the phone or walk across the street and talk to his neighbors/buddies/colleagues and tell them where VirTra and VTSI is headed and that they just might wanna get on board. That's what I do when I find a stock I like and I have some family and friends that appreciate it.
Hi Ponch, I too am highly fallible and I also make a ton of investing mistakes. When I posted that, I had just read the transcript and then went back and reread the one from 3 months earlier. It was just remarkable to me how different they were in both content and tone and that bothered me quite a bit.
As you point out, no doubt the company generates $ and might be highly profitable going forward. It might also turn into a great stock.
I will definitely keep watching and still might enter.
Well done Dibbs! That made me chuckle.
I do sometimes get accused of being a cheerleader (though the uniform would not do me justice) and a pumper (icky I would guess).
A new PR on a big or strategic order would work wonders.
A fund manager or two deciding to buy 1 or 2 or 3% of the company would work wonders.
A key insider buying additional shares would work wonders.
Someone like Taser sniffing around would work wonders.
Confirmation via sites 2 and 3 of Mod Round opening would work wonders.
Current shareholders stopping their dribbling of shares at this stupid low price would work wonders.
Q4 coming in at $5mil rev and EPS of 6cents would work wonders.
Point is, there are lots of possible and coming catalysts.
That really was a great article. Gives further insight into what separates VirTra from the competition.
I had to chuckle at the one error I the article...said VirTra's market cap was $460million (rather than the correct $46million). Maybe they are simply an article a bit ahead of its time?
ztect, At the Sept 16th shareholder meeting Ferris said VirTra would be attending and presenting at a number of 2017 investor conferences. I would think they would let us know a month or so ahead of each one.
OTCQX is much better than the pinks. From all the companies and stocks I've owned/traded/followed over the years, my opinion is there isn't any practical difference between the OTC or Nasdaq as long as the company is an SEC reporting company which VirTra will be in a few months.
Gregg, I agree with you and enjoy reading your posts and viewpoints.
All I know FOR SURE is that VirTra MUST deliver a pretty big Q4 when they report in March. The last 2 quarters of terrible revenue and no earnings has hurt my valuation argument and the stocks momentum.
If they deliver a $5mil Q4 with EPS of at least 6 cents then all will again be well. That would put them at 21.5 to 25 cents for 2016 depending on whether you ignore the 1X option charge in Q2.
If they lay an egg and come in again at 3mil with breakeven performance then the stock is at best dead for 6 months.
They also better handle the earnings release far more professionally than they just did in mid-Nov when the numbers got out during the market open time before the press release. That was bush league.
So for me, right now I am trusty the lumpiness argument with respect to Q to Q performance and believe they are positioning themselves for a decent 2016 close and stellar 2017.
Still there. Let's see....Should I sell now for $3 or should I sell half a year from now for $6? So silly.
I do like Bill and had a big laugh reading his post. But my world view is exactly in line with Iceland's post.
VirTra's product line will not be obsolete in either 3 years or 30 years (when Bill is 107) because it continues to evolve and change and stay necessary and relevant. They (VirTra) know better than anyone the threats to their business. And then think about when we were little kids and played cowboys-and-Indians or cops-n-robbers. The hunt/chase between good guys and bad guys hasn't much changed in 100 years and it isn't going to change for the next 100 either. Law enforcement will still be using guns/tasers, bad guys will be using guns/knives/cars/whatever. The good guys will always require a ton of training of which the VirTra simulators will always be a positive contributor.
That said, what is important to VirTra is that many of the common scenarios do change over time. Race is a bigger deal now than pre-obummer. Suicide vests are more common now than pre-911. Small town America has nastier drugs now with meth. Lawyers are more clever and our society more litigious. School shooters get more press and necessitate specialized training. All this stinks for society but is great for VirTra.
Bill, be happy you are 77. My Grandpa died at 74 and my Dad at 67. So if that trend continues you will still be on this board when I am long gone.
Bill, How can you even say something so silly as they "...will never do more than 30-50M in sales..."
Crystal clear they are a proven 20%+ grower:
2009: 4.35mil
2010: 6.42mil (+47%)
2011: 7.86mil (+22%)
2012: 8.83mil (+12%)
2013: 9.82mil (+11%)
2014: 9.8mil (+0%)
2015: 13.5mil (+38%)
2016: 17mil est. (+26%)
2017: 20.4 est (+20%)
2018: 24.5 est (+20%)
2019: 29.4 est (+20%)
2020: 35.3 est (+20%)
2021: 42.3 est (+20%)
Furthermore, when there are single contracts/awards/jobs out there to be won that are worth $40mil, it suggests to me a market that is huge.
Think about your own state or mine. Here in Wis we have 72 counties all with their own sheriff's depts. Then we have literally hundreds of cities with their own police departments. I live in a town with 1800 people and we have 3 full time cops and they have a new F150 squad, a new Harley squad, and a SUV squad. Point is, even in a tiny nothing town there is enough money and will available to buy a VirTra system once they become a must.
Lastly, VirTra EPS has grown slightly faster than revenue and that could really accelerate going forward.
Lastly, think what an attractive acquisition VirTra would be to someone else. And it could be done in a hostile fashion since Ferris only owns about 10%.
I like the last sentence in your post Gregg.
It reminds me of my favorite stock market saying..."It took my stock 5 years to triple in a week."
If real, it is a nice opportunity to buy a decent chunk of shares.
Pretty stupid though for whoever is selling no matter when they bought.
I also hope you had a good Thanksgiving! No fish was on the table. Had a traditional 16lb turkey and a slow cooker with 4lb of cubed elk with a hot curry seasoning....and all the usual sides.
In fact, rolled the dice at supper tonight and ate the last of the curried elk over some rice. Wife wasn't home so no one to tell me I shouldn't eat it since it was too old.
Today was a good day, quiet house, kids in school, relatives gone.
Assuming they submitted on Nov 9th or 10th, it has only been about 10 or 11 business days since then and 3 of those were during Thanksgiving week. I haven't a clue how long the process typically takes but I would guess we get an update this week.
I would think if you sent your 3rd party question to the IR financial profiles guy and cc Ferris you would get a same day reply.
Thanks for posting that transcript. I do not own any shares but am sort of interested. But man o man after reading that it is really difficult to justify buying the stock. What a mess.
Why don't they make their software such that the customer can configure/optimize it themselves? I know the answer and it is scary...it is because without the proprietary software they are just selling a commodity grouping of cameras.
Then he says they have no sales pipeline. Then he says they don't want to even sell any more until it is perfect.
There is potential here but there needs to be some significant strategic and operational changes.
Yep, sure do.
Hopefully this week we get a date for the first day of trading on the OTCQX.
Even better would be a multi-million dollar new order PR.
I also hope the company reports Q4 in early/mid February rather than late March but that is probably wishful thinking. I am just anxious/excited to hear Ferris' first earnings conf call and see who (if any) analyst-types are on the call.
It would also be nice if VirTra would publish their "road show" investor presentation schedule for 2017.
Fascinating to me how someone keeps dribbling out shares and lightening their % ownership. By the same token, nice to see them being soaked up by others (and a few by me).
Hard to believe FY2017 starts in about 33 days. A beautiful thing.
Happy Thanksgiving Everyone! Here's to the upcoming OTC listing and the floodgates of institutional buying!
I admit to not following super close since I don't own any shares yet.
midastouch, What is your overall take on this company? Is there actually a big market for their products? Are they done diluting via printing shares? Bottomline...Does the CEO care about shareholders?
Thanks
If you have the brain and attention span of a fruit fly then perhaps yesterday's results are bad.
If you have the brain of an investor and the ability to read and think then yesterday's results were really good. They are making a bit of a change to their lending standards and paying a more conservative dividend that is destined to increase.
The stock goes from a speculative pick to a conservative pick with far more secure forward prospects. It will be back to 7.60 within a few months.
When they report Q4 it will be interesting to learn whether or not the company purchased any shares. My guess is that they have not but there is no way to know for sure until they report the quarter.
Part of the reason I think it is unlikely is because typically company buyback of shares is limited to the times when insiders may also buy. Typically this starts 2 business days after the earnings release. But since VirTra is not yet an SEC company maybe those sort of rules/guidelines don't apply?
I'll just be happy when the uplist is behind us and all we care about are new orders and quarterly results and forward prospects and that sort of stuff. Maybe some institutional filings. Maybe the new director stepping up and buying some shares. Just seems lots of good news is just ahead.
For the most part I agree with your statements.
That said, I do think we can surmise a few things based on how the stock has reacted since the Q3 report.
- The stock is generally in pretty strong hands right now even if they are much the same hands as a year or three ago. Shareholders have been tested with a few spikes and almost-nasty dips. Tested with great reports and blah reports.
- If there was a motivated seller out there we might see some flashes of bigger ASK volume. Or the seller would simply enter orders and bail out. It is apparent significant buying interest (or maybe the company) exists at about 2.70.
Switching gears a bit, it seems rather obvious (based on the previously announced large orders) to me that some really big quarters are coming. Not sure if Q4 or Q1/2/3/4 but they are coming. Just think how easy the year over year comparisons will be for upcoming Q4 and Q2 and Q3. Q1 will be tough since Q12016 was so strong.
Taken in aggregate, the whole thing just strikes me that Ferris and Co are setting this up for a really nice cakewalk in 2017 and maybe are willing to support the current price until the big boys (if there are any) start buying in.
PPppsssstttt....(they told us the date in the RS press release...but you didn't hear it from me)
...but if no one told us how can we know it?
It's only $34,000 and remember that number is a "snapshot" as of a certain day/time/hour.
For example....I have a ton of cash in my personal account but at any one time I might have $2000 of credit card debt. I pay it off in full every month but simply use the card for convenience and for the 2% rebate.
What is impressive in the VirTra results is the cash build/generation.
Great post Teeroy. The paragraph you highlighted (along with the Mod Round balance sheet) makes it crystal clear to me why VirTra bought the additional shares.
Bill, I'm not sure why you are tossing my name into your posts regarding Modern Round? We all understand you are not a believer in the concept and didn't like Miller when he was associated with VirTra.
There are very deep pockets behind Modern Round so it will have a chance. The S&W CEO has almost limitless pockets. I think the quarterly Mod Round report tells us why the 2nd location isn't already up and running. $521k in revenue for Jul/Aug/Sep is not good enough for this sort of venue. It needs to be up and over about $800k (my guess). It would be interesting to see the progression in revenue from Jun to Jul to Aug to Sep to Oct.
You should really focus all your anger and suggestions toward Ferris by emailing and/or calling him. It does no good to rip away on this message board.
I've already sent my note to the CEO, you should do the same.
On the bright side...
Balance sheet keeps getting better and better. Large increase in cash this FY. Also, VirTra share of Mod Round is only valued at $136k on the balance sheet. This is very conservative.
Revenue through 9 months of 2017 is about equal to that of the entire 12month 2016 fiscal year. The accounts receivable and deferred rev lines in the balance sheet suggest a really good upcoming Q4.
EPS through 9 months of 2017 is 15cents which should be more than enough to support the current share price.
IF Q4 comes in strong (say $5mil rev, EPS of 5cents) then VirTra still gets to EPS of 20cents this FY and revenue will be about 25%+ ahead of last year.
Again, pressure these guys for GUIDANCE!
Don't you think today's late day trading answered that question?
Gregg, This was a major league screw up. This could have all been done today either before the open or after the close.
I think we do have reason to believe that Mod Round will be a success and a profitable one and that those shares that VirTra bought at 20 cents each will be worth much more on the VirTra balance sheet at some point within a year or two.
No, it is not a sure thing but does seem to be a reasonable gamble since the first location is up and running and seemingly doing at least ok or better.
I don't know about the G&A going up. Seems reasonable to me in a growing business where the big deals require lots of hand-holding to close.
All this angst that we shareholders go through could be avoided if they would simply provide forward guidance. We all need to pressure them to do so. Phone calls/emails/letters.
What bothers me is not the $3mil in revenue, it is the fact that this was released into the public domain DURING market hours and WITHOUT a press release to explain the results.
That is a bad mistake if you ask me and they need to learn from it and not repeat it.
Furthermore, if they are not capable of getting rid of "lumpy/irratic" quarters then they need to start providing forward looking annual revenue and EPS guidance. Until they start doing this, all the talk about improving shareholder value is just that - talk.
On the bright side, cash is up to almost $5million!
Sorry Weeble. Me bad/stupid! Ok, back to buying!
Weeble. Your post is not too smart. Silly risk for you to take.
Last year's Q3 was $3.936mil in revenue and $989thous in net income.
What happens to you if revenue does happen to come in at $2.9mil and the company reports a loss?
Poor decision Weeble. At what price did you sell?
No kidding. What possesses someone to enter a market sell order for a volume of shares that is equal to the daily volume? They got exactly what they deserved, a crappy price.
That said, this does illustrate that there are very few buyers sitting at the ready....but at least there are some.
They will be out bright and early tomorrow am before the market open. VirTra has been 100% consistent on the day/time of quarterly releases for several years now.
This stupid low $3 stock price should be a distant memory within days. Market PE based on trailing EPS puts this at $4.50 right now. Market PE based on current year EPS puts this at $6.00 right now. Assign the PE that it should be getting based on actual company performance and you can double those numbers. Assign the PE that a company like Taser (historically) gets and you can triple those numbers.
Just wait until the investor road shows start in 2017 and the uplist to Nasdaq happens in a year or three. With a real revenue/earnings/cash growth rate of 25%, the stock is going up...and fast.
Ooohh aaahhh oh.....and what if MR actually works out...Oh Nellie!
Number of outstanding shares is not similar. Artx has many more.
Avocado, You are so wrong that it isn't even funny. No one ever knows the numbers before they are released. This is not a leaky ship by any means. In fact if you look at the trading action after the last several quarters were announced you will see what I mean.
Go back to late March when Q4/full year were announced. Stock got hammered lower immediately after the release because many were expecting a higher rev number. Then a few days later it rebounded and then some. Go back to mid-May 2016 and look at the Q1 report. No one saw or expected 6mil in rev with EPS of 15 cents. The stock moved strongly up thereafter.
I've dug into ARTX a bit several times over the years and my conclusion is always the same - they have potential but the company is sort of a mess. That never seems to change. They also have quite a few different businesses and only a part of the company competes with VirTra.
Financially ARTX is also a mess. They are at best a break even zero growth company. They have much more debt than cash. This is one reason why ARTX is valued at a PS much below that of VirTra. Sometimes the market does get it right.