Stellar Quarter - Eyes Will be on US - New Valuation
I must first say this press release has re-defined the company, as a financial analyst, I am thoroughly impressed with the numbers.
- The company's short term liquidity, cash on hand have all been bolstered
- Per recent press release (happened after YE) leverage should decrease, share count down due to buyback
- Profitability shows immense improvement (Gross margins up to 54.69% from 34.9% in 2013, operating margins up to 26.7% from 10.62%, Net margins 25.2% from 9.68%)
- From a valuation standpoint we earned 0.06 in EPS pretty much all in one-quarter - albeit it may be an abnormal quarter so ill use 0.15 of EPS as an estimate of what can be expected in a full year - current diluted share count at 42.4M deduct share repurchase of 2.4M would give us approx. 40M fully diluted. The average valuation in the tech industry is typically quite high - ill have to do a more thorough comparison but let's just say we use an average multiple of 15 on the p/e.
- 15*0.15= 2.25$ per share
- I know many of you follow PYDS - very close in revenues to 3Pea - so lets say we trade at the same valuation per today - I'll use yesterday's close of 0.315 (0.315*137.22M shares o/s=43.224M$ market cap --> Then 3Pea should trade at 43.224M/40M= 1.08$/share as of today. (this does not include any future growth!)
Once I have more time on my hands I will make a more thorough analysis but it would not be unreasonable to see 3Pea at $1.50 within the next 6 months. Once of my favorite parts of the press release is them saying they have one of the most robust client prospect pipelines in the company's history - A sweet indication of things to come!
Hold tight my friends - much more to come.
E.
