Liquidmetal Technologies Inc (LQMT)

[NetAdmin2436]

Last earnings release was definitely a disappointment for many of us; especially after the what-seemed-to-be bullish Management Commentary on 8/4/2020. No, it wasn't a fraudulent statement. Misleading? Ya, the market would agree with that considering we went from .08 cents to .17 and back down here to .08 cents. I think it was scrapping the bottom of the barrel on what is considered "volume" order(s). Anyways, I digress.

Let's find the positives. So I've had some time to take several steps back and look at LQMT from a 30,000 foot view, so to speak. Generally I don't like assuming/forecasting because I'm usually wrong (My 800k guess for last quarter revenue was a miss). But according to the 3Q 2020 Earnings release we should have a general revenue forecast.

Our third quarter results reflect the completion of initial volume production orders under our outsourced manufacturing model. Since July, we have delivered 10,000 parts per month to fill a customer pipeline for a dental application. We expect continued deliveries, at similar volumes, to continue into the middle of 2021.

Great, that should create a baseline of revenues for 4th quarter 2020 and 1st and 2nd quarter of 2021. The rent we collect from MatterHackers should be the same if not slightly higher. All other administrative costs should be about the same. All this creates a scenario that baseline revenue should be about 327k for at least the next 3 quarters (until mid 2021). As JayBiscuit pointed out, they are now putting 23.8 million dollars to work. Who knows how much revenue that will generate. But I figure we are now talking 327k - 350k each of the next 3 quarters. To be conservative, I just put 327k on the chart. Jay might be right about this money being used to help finance a bigger whale type project, but I'm just going to concentrate on the revenue aspect. The debt securities that they purchased should yield more than a near zero bank savings/checking account.

For shits and giggles I put this expected revenue into a revenue excel chart so I could visualize the next 3 quarters, as compared to the last several years. Suddenly this stock doesn't seem so bad here at .08 cents. For the next 3 quarters we won't have to worry about another disappointing 33k, 71k, 55k, 80k, 48k, 58k, etc... quarter. If we are lucky enough, we get another PR announcing another contract(s). Of course the 3rd and 4th quarter of 2021 will big question marks and we will have to re-evaluate at that time.



I also compared previous annual revenues to the share price low's and highs of that particular year. I don't see any reason why we can't get back to the high teens, low .20's once the sentiment changes and continued baseline (or better) revenues in the coming quarters or better yet another PR announcing another contract or two. Overall the annual revenue numbers are gradually trending higher the last 5 years.

2015 – Annual Revenue 125k – PPS (Low of .06) – (High of .17)
2016 - Annual Revenue 480k - PPS (Low of.06) - (High of .25)
2017 - Annual Revenue 321k - PPS (Low of .18) - (High of .44)
2018 - Annual Revenue 532k -PPS (Low of .10) - (High of .28)
2019 - Annual Revenue 1373k - PPS (Low of .08) - (High of .18)
2020 - Projected Rev 758k - PPS (Low of .07) - (High of .17)
2021 - Projected Rev TO THE MOON!!! (I joke, I joke)


I get that these revenues numbers were not what we want and this company will still lose money in the near future. But that cash burn rate is down substantially and we can continue like this for 10+ years. That’s plenty of time to get some more meaningful volume contracts. Keep in mind this company has zero debt.

As you know, stocks overshoot to the upside and overshoot to the downside. We certainly can go back to the .07's again. The sentiment is currently negative after that latest earnings release and our next earnings release is still a couple months away. That’s a long time to go for frustrated/impatient investors and traders. These conditions create great buying opportunities for long term investors.

The bottom line: We are getting into oversold territory and I'm a buyer at these levels and will continue to buy more aggressively if we dip in the .07's or .06's. It's a good Risk/Reward right now if you have a long term view. This negative sentiment will change sooner or later. Buy low, sell high.