Great company report / review!
CONCLUSION
Marrying a history of success in the space by its CEO with unique, compelling offerings, Surge Holdings, Inc. is primed to emerge as a leader in serving small businesses and underserved, unbanked and underbanked consumers. Surge is targeting the bill payment and prepaid wireless services segment, a multi-billion-dollar opportunity. Based on industry estimates, the market is huge. Currently, 77 million customers utilize prepaid wireless services, growing to 93 million along with 58 million unbanked or underbanked. Plus, hundreds of thousands of business are prime targets as Surge merchant and ISO network members.
Surge’s innovative integrated approach has already resulted in a tremendous deal with the Oklahoma Grocers Association that if fully deployed, could be worth as much as $100M in annual revenue alone. Clearly, the Company’s Blockchain Fintech platform will attract similar arrangements.
Our preliminary estimates could prove to be conservative as the timing and order of magnitude of business could result in exponential, sequential top-line growth. At present, we forecast $25.3M in sales this year and $65.5M in revenue next year with EPS of $0.13. In our view, the stock reflects legacy business only and the near-term bottom while even our muted forecast should generate major upside. Our $3.25 target is based on 25x FY19E EPS and 4.2x FY19E sales. We rate these shares Speculative Buy.
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