Q: Can I get your take and valuation on this company please. How does it look for small cap, risk tolerant exposure? Thanks
5i Research Answer:
Momentum has been stong here up 117% over the last year. Recent quarterly earnings were strong, swinging to a small profit and displaying 84% revenue growth. Backlog is also decent at $52M at quarter end, up 33% from the year prior. Balance sheet is net cash positive but does have some debt at $4M. It is cheap at 12.4x trailing earnings and 1.2x trailing sales. Price/book is expensive however at 4.7x. Recent quarterly momentum has been good but it is too small for us to strongly endorse. It will be very volatile and risky going forward .