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  5. TSLA: XTRA This company seems to totally fly under the market’s radar. [Tesla Inc.]
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Q: XTRA This company seems to totally fly under the market’s radar. It develops and produces AI tech to provide physical security access at large venues and events. Financials are out soon and optimism is high. Recent multiple new contracts with major sports franchises, arenas and stadiums. Some major player customers (Tesla etc). The technology ought to be deployed at every school entrance across the US. Its major competitor is facing multiple lawsuits over its inferior product and is now embroiled in the New York Mayor/New York Subway contracts scandal. Seems to me the stock price should be on a steep upward projectile, yet it has remained stagnant for ages. What it is about Xtract that the marker doesn’t seem to like? Or is there something more nefarious at play to keep the stock price stifled? Thanks for all your advice and mentoring.
Asked by Chris on October 17, 2024
5i Research Answer:

XTRA has technology to detect concealed weapons, so unfortunately this is a growing market. It has $9.7M cash. In addition to its small size and general risks, the main issue we think right now is valuation. Market cap is already $150M. It has negative cash flow and is losing money, with more losses expected. The revenue base is only expected to be $13M this year, so it is already more than 10X revenue. Revenue is expected to double next year, but that still doesn't make it that cheap for a small cap. It only has two analysts covering it and is still quite unknown. MSGS (Madison Square Gardens) owns 16% and we do like that endorsement. We like its other partnerships. If it can translate orders into profits, or at least positive cash flow, we think investors will start paying more attention. 

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in TSLA.