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PERI trying to claw its way back after the flush from $9.70. 2019 pro forma w/ CIQ was $300M revs and $36M EBITDA. I’m concerned that the CEO Doron Gerstel will provide some lame guidance for 2020, but seems like there is a shot at $50M if advertising turns up and they get traction with their Syncromatic Branding platform + tailwinds from 2020 Olympics/election ad spending.
I hope Doron guides to $42M+ and comes in $46M+ EBITDA for the year. 10x on that gets us to about a $17 per share. Still a bit annoyed that Dror Erez is selling registering to sell shares. Need to clean him up.
SEAC I’m hanging in there/holding with 3.75 cost basis. If these Framework deals start accelerating, could be a massive stock.
Hard to say re SEAC guidance. I’m assuming they sandbag a bit, hopefully not too much.
Sounds like they are having a hard time selling their businesses. That STM book of biz is garbage.
SEAC it also sounds like part of the cash burn last Q was slight timing differences in working capital and cash receipts on deals sold in Q3.
I spoke to the CFO on Friday. He guided me to cash “stabilization” as discussed publicly on conference calls etc. I get the sense “stabilization” means generating $1-$2M in the quarter.
Rough math, if they sign 12 deals with $2.75 avg deal size (I get sense they will beat Framework deal bookings), and assume 20% cash up front, that is $6.6M. I’m guessing they have $4-5M of legacy runoff in Q4. And they should have received the $600k from the Acton HQ sale. Should get us slightly cash flow positive assuming $10M quarterly OpEx.
I’m not worried about MSFT. I’m hearing word on the street is PERI/MSFT may extend for 5 years this time. Would obviously be very bullish for MSFT.
Like I said, I understand CodeFuel searches outperform all KPIs and competitors. Really don’t see why this wouldn’t get extended.
PERI search biz with MSFT should not be a worry. I’ve spoken to the General Manager of CodeFuel and Doron. CodeFuel is beating all MSFT KPIs for search quality and is resulting in higher RPMs that Bing is reporting (in part).
Also the co developed application with MSFT Doron referenced is now live at privado.com. The relationship is strong and tight.
Here is another upside shot on goal: a potential deal for ex-USA searches ... GOOG?
Love what these guys are doing.
Very good acquisition IMO. For many reasons. Deal structured in shareholder friendly way. Strategic, etc.
But the biggest deal to me — advertising had two businesses (1) legacy run off which was obfuscating the growth in (2) Syncromatic Branding (a fully managed service + soon to be GA SaaS self service platform).
The growth piece underlying advertising is about $50M runrate now. Adding $50M from Content IQ allows Doron to begin to break out the legacy vs growth revenue in more granular detail.
Plus .. did you see the news about Google going to a cookie less approach for itself and partners in next year or two? CRTO got hammered on the news. PERI’s acquisition is positioning itself in a cookie less world for engaging/targeting audiences.
Beautiful, love it. This is a long term investment for me having bought in September and adding through the fall.
Cool. I built nice position in SEAC. Glad to see it turning up again and closing over $4. Nice volume.
Keep an eye on MAXR. Should have posted months ago. Balance sheet is fixed. Peak capex for new Legion constellation is passing. SS/L could get $1B+ Telesat LEO constellation contract. I actually think it is quite likely because SS/L built last two Telesat geosat satellites. And SS/L was formerly owned by LORL which owns 60% of Telesat. SS/L goes from cash consumer to cash creator.
The real show stopper is Digital Globe. Currently doing 850M revenue at 60-65% EBITDA margins. They lost a satellite last January. Crushed the stock since MAXR was already hobbled by SS/L and huge debt.
They are building Legion. It will cost $600M and provide 10x the capacity of the satellite they lost (WorldView4, which cost $850M). You get more resiliency from a constellation (less single satellite failure risk) and better economics (10x capacity for less capex).
I think DG can increase revenue to $1.5B in the next several years at 60% EBITDA margins. That is $900M EBITDA looking out to 2023-2024. Since Legion is less risky AND has better economics and the revenue streams are very sticky ($300M per year from National Reconnaissance Office), I could see it trading up to 12-15x EBITDA.
We are talking $10B+ valuation for Digital Globe. SS/L can probably be a $1B value again as space heats up.
What I’m trying to say is... there is a path to $200 per share here. Sounds crazy, I know.
Interesting. Is Bowser Report scammy? Not familiar? I’ve been building SEAC under $4. Yossi seems like an A player to me. Really like what these guys are doing.
PERI. All time high volume week. 4.5M shares traded. Really no activity on StockTwits or elsewhere. Appears like institutional accumulation given nice 4Q profit preannouncement. Might be the best play on ad tech. I could see this business doing $40M+ EBITDA in 2020 and get a 10-15x EBITDA multiple.
Yes, the market will need to re-rate too once it becomes better known that these Framework contracts are 3-5 year deals, usually 5 years. It’s not quite SaaS, but it is SaaS like. Definitely should get better than a 2x revenue multiple considering margins are expanding to mid 80s, with recurring revenues and operating margins that could expand to 30%ish.
I think management has been sandbagging on the operating model and growth rates, etc.
Re SEAC, potentially some selling early in Jan for those who wanted to defer gains on shares bought at lower levels in 2019?
Interesting. Still can’t sell any Visions direct. I haven’t seen any Skincure job postings really. Only ones are multi-center clinics that are covering more of their footprint such as Polley Dermatology. Show me story now IMO.
That CEO is a train wreck. Ugh.
I’m not pleased they couldn’t do any direct Vision sales even with new E/M codes. I think Skincure sales have to be discounted somewhat from a valuation perspective; there must be a reason derm’s don’t want to buy direct.
Time will tell. If there is something special here with IORT, there will be a long runway. Until then, I have a few better ideas.
I have to disagree. Reading between the lines of Joe’s comments, I think things are really screwed up at Skincure. I’m expecting Q2 to not be a good quarter as placements to Skincure will likely again be affected.
Just my 2c.
PS. I have pivoted my thinking on Sensus acquiring Skincure. I actually think the market would like it quite a lot since it is a bit more scalable IMO vs 1 time capital sale + 180 day terms.
The way I see it, if Skincure has 100 machines in the field, seeing on average 10 patients per month and a 60/40% split with clinics on Vision reimbursements (I understand $5k for Vision given extra diagnostic features, so lets call it $2,500 per patient), that is $2.5M per month / $30M per year. Joe said patient volume is growing 25% per year at all the clinics and there is some pricing leverage built in with potential CPT 77401 code revaluation next year or 2021.
Plus the Vision’s only cost Sensus $125-$150k to produce assuming 67% margins and $375k-$400k ASP. Would make for fast payback. I wonder if Arthur would go for that given his high standards discussed on the podcast.
Anyway, cashflow from SRT procedures could definitely fund IORT and direct SRT sales to derm’s. I’d guess the market would assign nice multiple to SRT procedure revenue.
I spoke with receptionist at http://middlesexdermatology.com/. They got a Vision in Q1 (from Skincure) and she said patients are happy and patient flow sounds pretty good.
Sorry, I don’t check this board much but came to see if you were posting anything new about ATOM. Great move.
I like that SRTS is hanging tough here. Warrants expire in a month. iCAD said IORT sales were strong/accelerating on the heels of more market awareness following a few global IORT clinical studies. They are also moving into prostrate cancer — performed first procedure, and are developing custom balloon applicators.
Hopefully SRTS will tell similar story and has 2+ more IRB placements done by now.
And here I was thinking I was the only one tracking Skincure hiring. Q1 looks very strong to me.
Hi, yes, I’m sure it is possible that SRTS could buy Skincure but I think that would be a negative. The model is to sell capital equipment... I want them to focus on that. They have enough on their plate with Sculptura, and rolling out smart lasers early 2020. I understand SRTS is looking to add more turnkey providers..
Nice summary, thanks. Seems like we have a problem with the IPO warrant overhang now. 2.3M warrants set to expire June 8, priced at $6.75. Curious how many have already been converted to common and flipped for $1ish profit while stock was running around $7.75 for a few months. We should know more in the Q1 10-Q.
Interesting close today. Broke out to new all time highs. Hearing anything?
Classic cup with handle breakout...
Don’t look at RDCM. That was a bust from $20. The industry decelerated a ton.
I’m long CSBR and SRTS. Happy to share some additional scuttle I’ve been doing on SRTS. Maybe send me a direct message on Seeking Alpha?
Sorry I don’t check iHub that often...
Regards
Maybe a big coming out party for Sculptura at ACRO conference next week in Orlando. Joe seemed to signal that 2 more IRB placements were close, and they hoped to announce soon according to his comments in Q&A on Q4 call a few weeks ago.
I’m not sure if you caught the marketing videos the company posted on YouTube? There was an 8min and 4 min video which showcased the tech, looked VERY disruptive. The company actually took those videos down, but left a 1min teaser video.
Maybe a big coming out party for Sculptura at ACRO conference next week in Orlando. Joe seemed to signal that 2 more IRB placements were close, and they hoped to announce soon according to his comments in Q&A on Q4 call a few weeks ago.
I’m not sure if you caught the marketing videos the company posted on YouTube? There was an 8min and 4 min video which showcased the tech, looked VERY disruptive. The company actually took those videos down, but left a 1min teaser video.
This is excellent DD my friend. Can you follow me on Twitter at twitter.com/indievestments so we can share some notes?
Really appreciate all the good work here.