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I’m assuming that if they had gotten that big T-mobile order by now they would release a PR, no? Or maybe even a large AT&T chunk?
So we should be bracing for their Q3 backlog number to look really bad then?
Did they respond to that at all?
New all time low today?
Looks like we’re soon to test a new low again.
Maybe someone needs to ask them on the next earnings call about whether they have considered looking for a distribution partner or even an outright buyer.
This one really is a case where the management’s lack of ability is the dragging force. It is a leaden to be reinforced that an investment is partially a bet on their abilities.
Really wish I hadn’t bought so much of this. And really hoping we get at least some pop up towards $5 again at some point to at least get out of this.
The fall off in orders last quarter mixed with Arthur’s putting his foot in his mouth wrt suddenly foreign customers don’t actually want their current products - they want these new ones, probably has placed a lot of doubt about its market space. There is a real possibility that management has really missed on estimating demand for their product.
It’s why they need to be announcing soon that they have the big orders.
We’re beginning to run out of time to hear about that t-mobile order and have it register to q3 backlog.
This thing is going to be in the crapper for the next 6 months anyway if there isn’t some good news to report in the q3 release given we know sales are likely to pull back at least somewhat.
It would appear that they can’t actually retain a lot of employees. That would be consistent with most of the employee reviews there. Fundamentally we may just have a problem that management is just bad at managing.
Announcing a big t-mobile order would do this thing wonders.
I’m increasingly thinking sams is delusional. They really need to prove that they actually have a product that the international market wants. So far it’s just him telling us they want it yet no sales.
I read this as more dancing around tripping over himself.
It’s way past the time where they need to put up or shut up. We may have to begin to accept that this has been a bomb of an investment and cut the losses.
Perhaps someone needs to ask Pola on their next cc what their view is on competition from Generac.
(Which as a side note would have in retrospect been a much better investment these past few years).
Article on Generac new products. I’m not so sure anymore where Pola’s new product lines will and won’t be competing.
https://www.bizjournals.com/milwaukee/news/2019/09/02/generac-will-introduce-intelligent-solar-battery.html?ana=yahoo&yptr=yahoo
Yeah, hopefully they put out a PR if/when they get that big t-mobile order, like they did last year.
New day... a new all time low.
Well that was some more end of day bs.
It has to bottom out somewhere, right?
This is behaving like they are heading towards bankruptcy.
That is an interesting thought and if true could be good for us going forward even if they had blown the communication about it up until this point.
Thanks for sending them that email and I'm interested in what they say back.
Yeah, its for sure all the computers playing games. But they are only able to have such huge influence on small volume if there is no buying interest by real people. So while the price action may not be reflective of real sellers abandoning en mas, it does show that there is little confidence/interest in buying even at these levels.
They need to stop going on road shows and just start delivering. No one looks at the stock chart, sees its one of the worst performing Nasdaq listed equities over the past 3 years and thinks ready to jump in.
Start putting up orders and start earning, and the share price will follow. Would also help if they'd stop sounding like they don't know what they are doing during earnings calls.
That is an interesting observation. Thanks.
Assuming that the were still making progress over the quarter, then their capacity in June was some amount greater than 3.3 million per month. It possible as of now, they are close to entering that 12 mil per quarter range.
Now just need the orders. I'm not banking on international at this point given how many times they've failed to deliver on that front, but if AT&T and T-Mobile come in strong over the next couple months?
New record low close! Now trading at 0.9x q2 annualized sales.
I doubt they want to do that though (looking for a buyer). Though current price levels are reflective of zero confidence in being able to deliver. I think this last cc broke the back for a large chunk of investors.
Which is quite indicative of what we have here. There aren’t many companies with 50+% sales growth y/y with almost no debt trading at less than 1x the previous quarter’s annualized sales.
They are going to have to do a lot to regain confidence. And they don’t seem capable of doing anything other than trip over themselves.
Thanks for the summary. Maybe it’s worth it for me to give him a call as well. Just a lot of questions.
What did he say that makes you say that?
Some scenarios for next year:
Currently, if we take what they just did in q2 as the baseline for what they do next year. Let’s say they keep blowing it, nothing international happens, their new products are largely a dud, but they keep the current year’s trajectory of tier 1 sales - ramping up AT&T and T-Mobile has been their only realized accomplishment this last year.
So let’s say $9.2 million per quarter next year on average - margins improve slightly but they also increase overhead a little and they start having a tax liability. All in all it’s about the same as q2 bottom line.
In that case a 15 P/E ratio on next year’s earnings would put them at about current share price at $3.60.
A 15 ratio is reasonable for a company that isn’t really growing but also not collapsing, which would be the case in this scenario. So essentially, the current price is set under the idea that they aren’t going to make any meaningful bottom line improvements on average next year relative to this past q2.
Now in the case where we say they don’t blow away expectations, but do manage to get some improvement on more tier 1 orders and some modest chunk comes in of something else (military, residential, overseas, tier 2, etc), so let’s say they can average next year at $12 mil sales per quarter (so not the more optimistic $15 mil plant capacity), assume margins improve to .33 (not hitting .35 because let’s assume they keep stumbling), and operating expenses rise to $2.7 per quarter (more overhead as they suggested on cc). We’ll also assume they begin to have some tax liability. They will have R&D credits and immediate expanding on investment so lets say 10% effective tax rate.
Well all this translates into them making on average a little over $0.11 per quarter per share. At a still modest P/E ratio of 15 that translates into about $6.75 share price. If we want to give them a P/E ratio of 18 because in this case they are actually growing quickly again, then that translates into about a $8.10 share price.
Bottom line here is that they are currently priced for no improvement. And given their past track record and dismal cc, it’s not absurd. But even in the scenario where they make no improvement, the downside risk at this point is minimal, and in the case where they do make improvement but it’s still somewhat short of what we’d hope for ($15 mil per quarter, .35 gross margins), the price is still potentially a 2x+ gainer from the current level.
Unless something catastrophic happens like them losing AT&T or them being forced to cut their prices a lot while also not reducing expenses, then this thing seems to be very underpriced. It just goes to show how close to zero confidence there now is in management’s ability to actually deliver.
I don’t think their IR firm is really the problem. It’s what they themselves say which is a combination of over promising and under delivering mixed with a scent of incoherent incompetence.
Now at $3.3, only trading at 1x expected 2019 sales (q1 and q2 actual plus analyst estimates for q3 and q4) and at 0.9x q2 sales annualized. If they can do even just $10 mil on average per quarter in 2020, current price is trading at 0.8x 2020 sales.
Now at 3.50, it is really tempting to go buy a lot more (but personally I already doubled down previously).
At Q2 sales annualized, this is now trading under 1x. And at a P/E ratio based on q2 earnings annualized under 15 for a company with 40-50% y/y revenue growth.
It really shows how much lack of confidence there is management.
One one hand in another quarter or two if they actually deliver, this thing could be at $7-8. On the other hand even if they do ok, a complete lack of trust in management ability may mean a low earnings multiple for quite some time until that trust is earned.
It’s a tough call.
Yeah, I saw that after when reading. Which is good. And is it correct to interpret what they said about fulfillment times that we should expect some portion of orders to be filled in the same quarter?
The guy does often come off that way. He and the COO contradicted each other on the share of backlog that would be filled in q3. And then the bs about not being able to give a current number after that’s been standard in past cc, so we have to suspect it’s ugly.
And as you said, suddenly there isn’t all this demand ready to buy their products internationally - the story they’ve been giving us for 2 years with nothing to show for it. It’s now that they are waiting on new products? Why should he believe that now? And even if true those new products are delayed because you apparently can’t hold onto engineers.
They often times come off as totally Incompetent. But this is from a company who’s investor presentation slide deck, amongst other sloppy mistakes, continues to show a map with their HQ to be in Tunisia. And no one has apparently caught this over the past year.
Well hopefully we’ll get a press release in a month or so like last time when t-mobile put in their order. Really hoping it’s much bigger. Because until proven otherwise you have severally discount anything they say they are going to do outside of tier one. I don’t trust tier 2 sales developing soon anymore than I trust them on international now. And military is a lottery ticket. Tier 1 is the the only segment that they actually have been able to achieve sales in.
Given their conference call, it’s quite plausible that q3 revenue comes in worse than q2. But if we think that q2 earnings of $9million+ is the new average norm, then the share price is now trading at about only 1x annualized sales.
This shows how much district there is in management actually delivering.
Any support at the previous all time low?
Well based on market reaction, looks like more take away on their delays, no international orders still, and implicitly warning of a bad q3 instead of the q2 beat.
So them tripping over themselves continues as always.
Looks like reset the clock again for 6 more months more. Getting really tired of being a bag holder.
Thanks.
So the good news:
1. They showed improvement on production capacity
2. They kept their costs under control. Sg&a held somewhat steady and and they made some gross margin improvement.
3. Headline is big beat on revenue and bottom line.
Bad news:
1. They seem to not be able to retain engineering talent - that the reason for the delay in launching new products?
2. Still nothing international and their talking points are no longer “just around the corner” but rather they need better support and they’ve messed up.
3. Backlog/ order book perhaps not so great. Bracing for a bad q3 where we step back on revenue? And odd that they won’t offer a current backlog number when they have done in the past. Sounds like it wouldn’t have been pretty.
So how should we think about this? The headline is really positive. But they may have just stumbled again in the short run future and we have to wait 2-3 quarters again?
Anyone have any other thoughts?
Well glad to see these results, particularly the flow through to the bottom line.
The backlog I hope is intentional and reflective of faster turn around times and not softening orders.
I won’t be able to listen to the call until later tonight, but any big highlights?
Thanks.
I hope this bad price action in the last week isn’t a prelude to bracing for another turd of a quarter.
Well the Roth guy didn’t change his estimates following the q1 call. He should have revised up but doesn’t seem that he bothered. But this will make the news of the earnings to be reported as beating consensus assuming they don’t really blow it.
Well I hope you’re right. Would love them to actually “beat” whatever the official expectation is for once.
Let’s be relatively conservative here: They do $9 million (only modestly more than q4), have margins of 0.31 again (assume between the line of credit cost and their normal tripping over themselves keeps margins similar to q1 despite more volume), and operating expenses stay at $2.3 mill (same as q1), then that translates into about 5 cents per share pre tax (they should have some deferred tax assets left).
So even this relatively conservative estimate puts then at $9 mill top line and $0.05 per share bottom, both would be reported as a beat.
What I’m hoping for is they break through $10 million top, get their margins to .32 anyway and keep their operating costs in control. In that case it’s almost 9 cents a share and this thing totally takes off. (But I’m not betting on this).
Expectations are so low right now, all they need is a quarter or two of actually delivering.