EQLB INVESTMENT HIGHLIGHTS
According to market research firm Mintel International Group LTD, the energy drinks market has grown by 240% over the past five years. Current annual sales are estimated at around $4.8 billion, and we believe that sales could double in five years.
EQ Labs’s unique effervescent tablet form gives it key advantages over its competitors. The Company’s product is more economically efficient and convenient, since it is more portable and can be used in any beverage, including alcoholic drinks. Introduced only 2 years ago, a migration toward tablets and powders has been occurring, specifically due to the portability and convenience features.
The Company distributes its products through national distributors, including heavyweight McLane Distributors Co., which distributes to the national convenience store chain 7-Eleven, and many other convenience and grocery store chains. 7-Eleven, which has nearly 7,000 stores nationwide, is a very important end market as convenience stores are key channels for these products. EQ also works with key regional distributors, and is approved for purchase in Latin America.
EQ Labs, Inc. is a pure play and an inexpensive way to play the huge popularity of the energy drinks market and the migration from energy drinks to tablets. Given that a sizable percentage of users are teens and college students, we believe that sales could see a boost with the recent return of the school season. In our view, this is not reflected in the current share price. We rate these shares a Speculative Buy and believe that the shares could reach $0.40 as news regarding distribution, sponsorships, and sales occur.