Snipp Interactive, a tech company offering software for innovative loyalty programs, is a nano-cap ($25M market cap). We believe the company has a great technology, and, more importantly, set the stage for explosive profitability.
Admittedly, its chart does not look great. We believe, however, that the fundamental story will soon be visible in the chart (price and volume).
After an incredible rally in 2014 and 2015, the company engaged in an acquistion, after which the stock price collapsed. The stock not only got ahead of itself, but the company was not able to book decent revenue growth, and profitability was really bad.
It seems that the company has been very busy readying itself for its next growth phase. The company’s CEO provided answers on burnings investor questions: Snipp-Investor-FAQ-July-2016
We selected three quotes from the Q&A:
“We expect growth to begin now. We spent the first few years of our existence in development mode and the last few quarters cross-training our sales teams post-acquisition, with additional refocusing on longerterm, relationship-driven contracts. These high-margin long-term contracts are the result of gaining the trust of clients, so signing those types of deals can be considered a long-lead-time item in terms of sales cycles.”
“We made a decision to accelerate the integration of our sales teams (Hip Digital & Snipp) during late 2015 and early 2016, which impacted our sales efforts for several months and delayed our expectation of reaching CFP, however we believe this extra effort will benefit us in the second half of 2016. Our current goal is to be Cash Flow Positive in late 2016.”
“We have invested in an engineering team that has the ability to scale with our revenues, so very little additional investment will be needed until we get to a range of $50MM in revenues [given $12MM revenue forecast for 2016].”
We leave it up to readers to judge theirselves. The coming earnings call will be very important, as the above quotes and all other answers by the CEO should be reflected in the financials.
We warn readers that this is a nano-cap, though with great prospects, but risk is elevated when investing in this type of small company.
