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NEW YORK, NY/ ACCESSWIRE / September 24, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update on DirectView Holdings, Inc. (OTC PINK: DIRV) with a target price of $0.08.
The report is available here: September 2018 Update Note.
DirectView Holdings, Inc. (OTC PINK: DIRV, "DirectView") provides a full range of security, surveillance, and communications solutions to corporations, organizations, and government agencies in the United States. Under the guidance of co-founder and longstanding CEO Roger Ralston, DirectView has provided comprehensive communications and surveillance solutions since 2006. During that time the company has amassed an impressive customer base that includes Hilton, Sheraton, the US Postal Service, and Montessori, among others. DirectView completed acquisitions of two Texas-based private video security and surveillance companies in 2017, Video Surveillance, LLC and ApexCCTV, LLC ("Apex"), which have helped reinvigorate the company's sales momentum while adding a significant direct online sales presence at apexcctv.com. We see DirectView as having significant potential for growth if the company can execute its organic sales strategy while supplementing its core business with follow-on acquisitions similar in size to Apex.
DIRV reports record 1H18 revenues of $2.3mn
DIRV reported record 1H18 results on August 20, 2018, with revenues reaching $2.3mn in the first half of 2018, up 70.3% versus $1.4mn in the year-ago period. DIRV generated growth from sales execution and the impact of the Apex and Video Surveillance LLC acquisitions, which took place in April 2017. We note that revenues of $2.3mn in the first half of the year are already approaching full-year 2017 revenues of $2.9mn. Results also included record gross profit dollars for the company, which were $1.0mn versus $0.7mn in the year-ago period. For the quarter, 2Q18, the company maintained revenues above $1mn, reporting a top line of $1.1mn, a 9.8% drop versus $1.2mn in 2Q17. EPS was $0.11 due to a non-operating gain from a change in the value of derivative securities.
New business announcements suggest DIRV gaining traction
DIRV has issued multiple announcements citing new business wins in the last several months. The company reported new deals in the education sector from a Texas college and New York City private school and reported that it anticipated to sign a seven-digit master sales contract with Mission Foods providing extensive surveillance and access solutions for the company's new logistics facility outside of Dallas, TX. Additional recent sales highlights of note include a new $150,000 video security contract for a premiere New York City hotel. In its announcement, DIRV management noted that the deal may be a harbinger of future business in the sector, stating that many hotel owners in New York City are opting to overhaul their existing and outdated security and surveillance systems. We note the hotel sector has been a source of strength in the past for DIRV, which counts Marriott, Trump Hotels, and Hilton among past installations.
Updating price target to $0.08
We are updating our price target for DirectView to $0.08 to reflect recent results and an updated share count since our last note. The company most recently reported shares outstanding of 221.15mn, with the increase coming from conversion of securities and recent fundraising. We continue to see the company as a speculative company positioned to grow if it can execute its sales strategy in the large and fragmented market for video security and surveillance solutions. Mitigating this view are the considerable financial and operational challenges faced by the company due to a weak balance sheet and negative cash flows. If achieved, the target of $0.08 implies a market valuation of $17.7mn, or 3.2x FY19E revenues of $5.5mn, assuming 221.5mn shares outstanding as of August 20, 2018.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About DirectView Holdings, Inc.
DirectView Holdings, Inc., (DIRV) together with its subsidiaries, provides video surveillance solutions and teleconferencing products and services to businesses and organizations. The company operates in two divisions, Security (Video Surveillance) and Video Conferencing. The Security division offers technologies in surveillance systems providing onsite and remote video and audio surveillance, digital video recording, and services. It also sells and installs surveillance systems; and sells maintenance agreements. The company sells its products and services in the United States and internationally through direct sales force, referrals, and its Websites. The Video Conferencing division offers teleconferencing products and services that enable clients to conduct remote meetings by linking participants in geographically dispersed locations. It is involved in the sale of conferencing services based upon usage, the sale and installation of video equipment, and the sale of maintenance agreements. This division primarily provides conferencing products and services to numerous organizations ranging from law firms, banks, high tech companies and government organizations. www.DirectView.com
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