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Congrats to all the longs. It's been an extended wait. I first bought in 2016. Don't own any now. Hope it continues to run.
So many false starts on VTSI over the years. This looks to be the real thing. Good luck to all.
Wow! Just checked in on VTSI. Congrats to all long timers. Guess i should have remained faithful. Long time coming and deserved.
Reading the CC. Looks like management is realigning the business operations nicely. Actually taking steps suggested on this message board for years. Congrats to all of the consistent longs.
Ok guys. I'm back in for the earnings move...one way or the other.
Just came over my stream. Investor presentation.
https://capedge.com/filing/1085243/0001493152-23-033732/8K/file/2
I agree. But if it does then Cash should double! At the least.
I went back and read the conference call transcript. It is still confusing. So she is saying that because of some accounting system changes that they had to send out invoices for partial work done that previously was recorded in unbilled revenue? So from an accounting perspective I can see that they credited Unbilled Revenue and debited Accounts Receivable...basically moved those assets to A/R. But that doesn't account for that huge increase in A/R.
Signed,
Confused in Tucson
It makes all the difference which bookings number is correct. My guess is that the $8.4MM is for the quarter because otherwise the reconciliation of Backlog from 3/31 to 6/30 makes no sense.
And I still don't understand that Accounts Receivable number. It's like 3 standard deviations higher than the norm. I immediately think they are not collecting what due them from sales but that also doesn't make sense. Their cash in bank made some sense.
This was a confusing Q2.
Looks like they only had $4 MM in bookings in the 2nd qtr. Hmmm! 1st qtr bookings was $4.4 million. Backlog went from $18.9 MM @ 3/31 to $16.4 MM @ 6/30. With 2nd qtr revenues of $10.3MM does this make sense.
And that Accounts Receivable number...$17.9MM! That makes no sense at all to me. It was $4.7MM @ 3/31. Must have something to do with the big drop in Unbilled Revenue. I've never seen A/R that high.
Not sure how they handled that $7MM in STEP contracts.
Not trying to throw a monkey wrench into the works. Somebody enlighten me.
From 10-Q:
Bookings and Backlog
The Company defines bookings as the total of newly signed contracts and purchase orders received in a defined time period. The Company received bookings totaling $8.4 million for the six months ended June 30, 2023. The Company defines backlog as the accumulation of bookings that have not started or are uncompleted performance objectives and cannot be recognized as revenue until delivered in a future quarter. Backlog also includes extended warranty agreements and STEP agreements that are deferred revenue recognized on a straight-line basis over the life of each respective agreement. As of June 30, 2023, the Company’s backlog was $16.4 million. The breakout of this backlog includes $7.8 million in capital, $6.3 million in service and warranties, and $2.3 million in STEP contracts. Warranties/Service and STEP backlog calculated in this number is revenue that will be recognized on a straight-line basis over the next 7 years. In addition, there is $7 million in renewable STEP contracts over the next 5 years. Management estimates the majority of the new bookings received in the first six months of 2023 will be converted to revenue in 2023. Management estimates the conversion of backlog based on current contract delivery dates; however, contract terms and dates are subject to modification and are routinely changed at the request of the customer.
Long time coming. Very nice!
Thanks. Missed that.
Solid, Steady Quarter. Better than I expected. Didn't see anything about the backlog.
Fish, Then I suspect there's more pain coming with Virtra. Jesus help us!
We should've bought Axon.
Axon Enterprise Inc (AXON) is currently at $205.65 , up $29.92 or 17.03%
--Would be highest close since May 9, 2023 , when it closed at $226.88
--On pace for largest percent increase since June 1, 2020 , when it rose 18.15%
--Snaps a two day losing streak
--Up 10.61% month-to-date
--Up 23.94% year-to-date
--Down 9.62% from its all-time closing high of $227.53 on April 18, 2023
--Up 63.12% from 52 weeks ago ( Aug. 10, 2022 ), when it closed at $126.07
--Down 9.62% from its 52-week closing high of $227.53 on April 18, 2023
--Up 85.86% from its 52-week closing low of $110.65 on Sept. 26, 2022
--Traded as high as $207.73 ; highest intraday level since May 10, 2023 , when it hit $224.11
--Up 18.21% at today's intraday high; largest intraday percent increase since Nov. 9, 2022 , when it rose as much as 18.59%
--Best performer in the S&P 500 today
All data as of 10:18:09 AM ET
Think I'll wait until the ER. May go long or short then. No need to rush it.
I'm a "short chicken" also. I take fairly small positions. I started following Virtra in 2016 and was a full-on bull. The product was in the sweet spot as I saw it. But it seemed the sales org couldn't make the vision happen. And on top of that the few sales/installations were slow to happen after being booked. That's when I decided to trade it. I've had profits and losses on the trades but overall I'm up low 6 digit profits in all those years.
I hope it goes to $20 tomorrow for all you longs. I'll just applaud your persistence.
Yes. Twice since the 1st qtr report. I held 10,000 shares into the 1st qtr report and sold those for a nice profit but the shorts were both small profit trades. Should I have held those 10,000 shares until today? Absolutely! Would have been more profitable. But I've been burned by VTSI before by holding too long...just look at a chart. So I just got my small piece of the pie and have moved on to other prospects.
At 71 yo I'm mainly a dividend guy now and just trade for fun. This should have been a $20 stock years ago.
There is almost no short interest in Virtra right now so I was surprised that no shares were available to borrow. In my experience you have to inform your brokerage if you wish them to NOT offer your holdings for the loan program. I have done that in my brokerage account many years ago.
Finfiz shows only 13% institutional ownership. So not sure if some big fish have locked up all the shares. Finviz also shows only .21% short interest.
I use Vanguard so maybe it's a Vanguard thing only.
Anyway I can only think it's a good thing for Virtra bulls.
Don't think I don't believe in Virtra because I do. I just never believed in management until Givens came along. The one thing that makes me hesitate about the 2nd quarter earnings release is that weak 1st quarter bookings. What's the old saying..."never fall in love with a stock".
I've always been a trader of Virtra. So, with that in mind I'll just post this from my attempt to short it this morning. I'm a long-term believer but I try to take advantage of short term moves. So don't hate me.
Reject status details
This order to sell short wasn't accepted because shares of this security aren't available to be borrowed at this time.
Lots of Job Openings.
https://www.virtra.com/overview-le/careers/
I had a limit sell for half my holdings at $5.96. Glad the high was a penny short. Lucky!
Somebody getting interested the last few minutes.
Added another 500 shares this morning @ 5.38. Accumulation!
Here's what pastes:
Summary
The Q4'22 report was extremely bullish for the stock's 2023 prospects.
There was good news about revenue, margins, and expenses.
The market still undervalues VTSI, which should be north of $10/share by the end of 2023.
Handcuffed suspect being arrested by police at night
kali9/E+ via Getty Images
VirTra, Inc. (NASDAQ:VTSI) sells state of the art training simulators for police and military use. I profiled the company and predicted 2023 results in my prior article here. Since publication, the Q4 report was extremely positive, and my target price range has gone from $6 - $9 to $9.60 - $14.40 per share.
Let's review some of the positive developments from the company 10-k and Q4 management commentary.
1. Margin Outlook
On the Q4 conference call Richard Baldry of ROTH Capital complimented the quarters gross margins and asked if they are sustainable? Co-CEO Bob Ferris said, "Am I happy with gross margins? No, I'm never happy with gross margins. I think the trend will continue to go up. I would say maybe 10% higher is kind of where I would -- it would be a fair target over the next 18 months". I assumed gross margins of 55% in my prior article, because Bob had targeted margins of 50% - 60%, but 10% improvement on Q4'22 or FY'22 equates to gross margins of 67% - 71%. Though this range will probably not materialize immediately, it looks like margins should be at least 60% in 2023 and even higher in 2024.
2. Backlog Guidance
The company's backlog ended 2022 at $27.7M, up 20% from the end of 2021 despite record annual revenue of $28.3M in 2022. During the Q4 call, Richard Baldry asked management if they'll be able to cut the backlog down over the course of 2023? Bob replied that his goal is to cut backlog to "less than half" of $27.7M. He outlined that after this reduction, backlog should start to grow as STEP deals increase in importance for the company. Bob did not provide a timeline for accomplishing this, but if they make significant progress over the course of FY'23 the company will beat my $35M revenue estimate.
3. STEP Commentary
On the Q4 call VirTra provided the most in depth data ever about their STEP (Subscription Training Equipment and Partnership) offering. In 2022 STEP revenue was $2.9M, representing 10% of revenue and 48% growth over the prior year. This revenue is extremely high margin with retention rates north of 90% at lease expiry. In my $35M revenue model I only assumed $5M of STEP and warranty revenue. In 2022 the company reported $5.8M of STEP and warranty revenue. Since they will likely exceed this amount in 2023, there is at least $1M of cushion on my $35M revenue target.
4. Balance Sheet Factors
VirTra ended the year with $13.5M in cash compared to $19.7M at the end of 2021. This $6.2M cash burn seems concerning at first glance, but upon deeper examination it is an encouraging sign. To begin with, net inventory increased by $4.6M over the course of 2022. I expect this to reverse as the company works through backlog in 2023. Furthermore, the company had an increase to unbilled revenue of $3.5M in 2022. That number will likely descend as invoices go out the door. VirTra's cash drain in 2022 was driven by inventory and unbilled revenue increases that will reverse in 2023. There is no risk of dilution in 2023.
5. Operating Expense Levels
Profitability is critical for growth stock performance. The company clearly stated that gross margins are going to improve in 2023, but what about operating margins? VirTra's operating expenses decreased from $3.6M in Q3'22 to $3.4M in Q4'22. Asked to comment on the trend of absolute spend during the Q4 call co-CEO John Givens stated, "it's going to go down and stay there for several quarters anyways.". As such, my original $16M in operating expense assumption for 2023 looks quite conservative.
Updating the Operating Model
It is appropriate to change the 2023 revenue target from $35M to $36M. Likewise, 2023 margins should be 60% not 55%. Furthermore, it's fair based on trends and guidance to take opex down from $16M to $15M. Assuming the company pays the full corporate tax rate of 21%, this yields net income of $5.2M. With 10.9M shares outstanding VirTra should generate $0.48/share in earnings. If the market applies a 20x - 30x P/E multiple to this micro-cap profitable growth story shares will be worth $9.59 - $14.39 per share.
A screenshot of a list Description automatically generated with low confidence
2023 Operating Model (Excel)
Conclusion
The Q4 report and conference call was bullish for VirTra. Margins are going to be higher than I previously thought, the company is making aggressive statements about working through backlog, and the STEP offering is proving to be popular. The company is carefully managing expenses. VirTra should generate almost $0.50/share in earnings and trade north of $10 within a year.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
Virtra Facebook ad this morning.
Interested in a traveling position that can have you supporting law enforcement and military all over the world? The Field Service Representative position installs and performs maintenance on client simulators. #Hiring
https://hubs.li/Q01Jzr1V0
From 10K:
Cost of Sales. Cost of sales were $12,047,366 for the year ended December 31, 2022, compared to $13,028,844 for the same period in 2021, representing a decrease of $981,478, or 7.5%. The year-over-year decrease was due to a significant increase in capitalized labor as multiple projects are set to complete in 2023 as well as an increase in recurring STEP revenue that has no associated cost of sales for future years.
Maybe she's working on the 10-K.
In 5 years AXON is up 455% and Virtra is down 2%.
Todays action:
Axon Enterprise Inc. (AXON) is currently at $214.50 , up $14.19 or 7.08%
--Would be new all-time high (Based on available data back to June 7, 2001 )
--Would be first new all-time high since Feb. 11, 2021
--On pace for largest percent increase since Nov. 9, 2022 , when it rose 14.56%
--Currently up six of the past seven days
--Currently up three consecutive days; up 10.82% over this period
--Best three day stretch since the three days ending Nov. 11, 2022 , when it rose 21.96%
Saw this morning on a stock I have followed. Not sure if Virtra is part of this whole movement.
Maxar receives contract for Phase 3b U.S. Army’s One World Terrain
06:17 AM | (MAXR) | By: Manshi Mamtora, CFA, SA News Editor
Maxar Technologies (MAXR) bags Phase 3b of the U.S. Army’s One World Terrain (or OWT) prototype other transaction agreement contract.
The OWT program delivers 3D global terrain capability and associated information services that support a fully accessible virtual representation of the physical Earth through the Army network. It is a key component of the Army’s Synthetic Training Environment (or STE), which provides a realistic, common and automatically generated global geospatial dataset for simulation, mission command and intelligence systems.
The original OWT contract was awarded in June 2019 to Vricon, which was acquired by Maxar in July 2020.
WTF? Did Fish bail today? The one day I go to the golf course and we have 6 months of volume.
Fish, I'm not sure why you'd stick with this for the long term. So many more LT holds out there if that's your thing. It's been a trading stock from the git go. Management has never shown any shareholder love since I've followed it. They put out the qtrly/annual filings at the last moment as if it were a burden for them. Guarantee they wish they weren't public. Not sure why they don't put together an offer for the whole thing.
I'm Bullish short term because I'm thinking they'll put together a good quarter this year and the stock will double with new pigeons flowing in. I'll be out quickly unless they change their "toon".
Wishing all well. Bruce
Some excerpts from an AXON article this morning on Seeking Alpha which mentions VTSI...actually more than mentions it.
In addition to analyzing Axon's current valuation, I'll discuss a microcap name in law enforcement, VirTra, which has some similarities to that of Axon 20+ years ago.
VirTra has a niche, can it have more?
In that recent article about potential 10x return stocks, Seeking Alpha user "PatentMan" brought up this company in the comments. It intrigued me, so I dug a bit deeper.
https://seekingalpha.com/article/4571698-axon-enterprise-and-a-lesson-in-50000-percent-gains
Ha! I was asleep before 10.
Happy New Years to all!!! I have my Virtra shares accumulated and ready for a double from here. I see $9 later in the year.
VirTra: Set To Double In 2023
Dec 06, 2022 05:38 AM | VirTra, Inc.(VTSI) | By: Growth Stock Prospector
Read now »
https://seekingalpha.com/article/4562578-virtra-systems-set-to-double-in-2023
VTSI should be the poster boy for the "never fall in love with a stock" maxim and the "greater fool" theory.
One of these days management MAY find a path to sustainable growth and profitability but so far no cigar. I continue to trade it until that day comes.
Good luck to all.
The 4th quarter's disappointment excuse will be the holidays. But the backlog will be hugely!