Trent... I think Q3 bookings will be the key. Scenarios:
1. I think the stock is priced such that the market is expecting a decline from Q2. The CEO said he thought Q2 would be the peak. However, he clarified in the Q&A he was being conservative and that Q2 came in higher than internally expected. If Q2 came in at $9.5M in bookings, I think the stock stays in the $8 range, maybe low $9s. Probably an opportunity to hold a core position, but flip out of some shares if it shot up for a day and buy back in the weeks/months to come.
2. I think if they came in flat with Q2.....low $10M range, then the market will realize that the company will do $1+/share in 2018. You figure they will do 20+ cents/share this quarter. The backlog and (especially) the deferred revenue will make this happen. If bookings were similar to Q2 then you are looking at a similar number for in net income for Q4. You take that out into 2018 with the IoT revenue starting to flow in and it looks good. I think the stock moves up to $10 if this scenario happens.
3. Bookings came in higher, say $11M. This is obviously just fingers crossed type of thinking. I'd like to think the automotive industry is ramping up more and more. Not on cars sold, but on semiconductors added in + amount of data put on those chips. As the CEO said, there is a lot of growth from just an increase in data. Think of a factory. If you add in more data per chip which increases the time to do so, then you better add in more machines doing it or else you just created a bottle neck in the whole operation. I think if this happens then shareholders can sit back and relax and enjoy the ride to $20+ over the next 12 months without much worry. It'd be obvious the DAIO is in the right place at the right time and IoT will only add to to it.
Time will tell. I will say that when you listen to the CEO on the investor presentations (he's doing another one on Sept 20th), he sounds like things are going very well. I'm hoping that bodes well for Q3's report and gives investors scenario #2 or #3.
