I tend to think that’s possible
They have several different vehicles to grow revenue well beyond where they are at.
Better service side revenues now that we seem to be past the trough on defense spending.
Better sales driven by the product refreshes on echoscope. The next gen products should open up sales opportunities they didn’t have before.
Expanded thermite sales. The company has generally been pretty conservative and they are calling for 4-7 million in annual thermite revenue in their investor deck. Timing on that isn’t clear but it’s a tailwind I think we can assume will help them on the revenue side sometime in the next year.
A pickup in offshore drilling would have been on my list and seems less important with $50ish oil but offshore activity has been increasing recently. If we get any kind of snap back in oil prices that may be back on the table.
The hud-Davd contract with the navy which seems like it could be a huge source of revenue. The company is tight lipped about the size of that one but it seems like something that could be an 8 figure contract.
There are some risks here as well. You have to watch the brexit impact as a geopolitical risk. Also while I don’t think they are getting much revenue at all from oil right now $40 oil would not help.
But with all of that I agree that it sees 12 in the next year. Their technology really is superior right now and they are run by what seems to be a prudent management team focused on both profitability and reinvestment. They did 5.7 million in revenue last quarter spent 500k on R&D and still made 2 million dollars ,granted untaxed, but it shows a huge amount of operating leverage in their business.
This is of course a small company and they can be a crapshoot quarter to quarter. They can get lapped on the technology side etc. etc. I just like the odds here. Was also glad to see someone who thinks the same way just bought 2 million dollars worth of stock. That isn’t proof of anything but it’s what you want to see.
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