NCI just issued an equity offering at a price of $1.4 for aggregate proceeds of $5.2M. The size of the offering is quite large (10% of NCI's market cap) relative to previous years’ equity issuance of around $1M. The purpose of the issuance could be to fund growth and take advantage of the record valuation in its share price.
NCI just recently raised guidance for FY2024. NCI expects revenue to be around $55M, an increase of 10% over the previous projection of $50M, along with a revised net income margin to 14% from 10% previously. The result is driven by a sustained and rising demand from new and existing customers.
Overall, NCI is demonstrating strong execution, NCI is an interesting, profitable growth story that has shown solid momentum. But its market cap is just $50M, a really small and illiquid stock. We would be comfortable to add to NCI over time as the company continues to execute and we would be willing to average up.