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Numerex Corp. (NMRX) Message Board

  • Eggplant101 Eggplant101 Feb 23, 2011 9:24 PM Flag

    Q4 missed . . .

    1. Q4 Subscriber adds should have been 122,00 - enough for 30% growth from 4Q09. Actual adds were only 69,000 -- a HUGE miss.
    2. Q4 revenue should have been $15.77m, a 16% rise from 4Q09 -- instead it was only $14.66m, only an 8% rise from 4Q09, and a 2% DECLINE from 3Q10.

    I think something is wrong -- maybe they had some unanticipated churn, or the business generates higher churn than they were able to correctly anticipate. Either way, the top line #'s were a real miss. With high growth, high multiple micro-caps, that's often a disaster, resulting in a very sharp correction, like the one we have just seen.

    I guess the stock got far ahead of where it should be based on Q4 reality. Where will the stock settle?

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    • at the last conference call he advised stockholders that a large order might not come until q1 2011. the weakness is great since all the selling is going from weak hands to strong hands who appreciate what is going on here and are buying to hold for a future payoff. the company appears to be working on multiple big verticals all of which take time to test and then implement. he has already told us that he is working with the 5 top broadband companies and 4 0r 5 of the top auto insurers. in addition to ge, tel cel, and his carriers. i am sure that there are multiple other verticals in health care, logistics, etc. it all takes time. the concepts,etc. are all new not only for nmrx but also for their customers. he told you everything is going well but it takes time. when it all starts kicking in then it should be explosive. for example there are probably 75 million homes or more with broadband. if only a small percent convert to home automation that one vertical could be by itself unbelieveable alone. this stock requires accumulating and waiting patiently for things to happen...2010..2013. i sleep confortably at night knowing that i own this stock.

    • Consensus is $0.30 and $0.42 GAAP EPS for 2011E and 2012E, respectively. Non GAAP EPS is at $0.36 and $0.48, respectively. Assuming a FCF yield of 5-7%, you would put 15-20 multiple on 2011. If initiatives pay off then maybe a 15 multiple on 2012E. Realistically, fair value is probably around $7 per share. If they can get subs up and stabilize ARPU, which has been falling off a cliff, then maybe a little better than that... IMO

 
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