SYTA: Siyata Mobile reports strong 1st quarter 2023 results which supports price target of $0.75.
NASDAQ:SYTA
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Siyata Mobile (NASDAQ:SYTA) has laid the foundation for greater distribution and sales with expanded relationships and has broadened its offerings in all three of its product categories into North America. The company is seeing strong sales momentum so far in 2023 and is hopeful that this momentum will continue as it leverages its new key sales channels.
Rugged Handsets
Siyata’s rugged handsets are targeted to the approximately 47 million enterprise task and public sector workers across North America including construction, transportation, manufacturing, utility, public safety, education, and federal government. The SD7 is a next-generation device and Siyata’s first mission-critical push-to-talk (MCPTT) handset.
The MCPTT SD7 device has the potential to disrupt the land mobile radio (LMR) industry because of its unique form factor, competitive price point and purpose-built functionality. This should be highly attractive to users in multiple industries where critical communications is essential to their operations. The company believes based on current strong interest from customers, distributors and carriers, that the SD7 will drive meaningful revenue growth going forward.
In-Vehicle Devices
In late 2021, Siyata launched the VK7, a first-of-its-kind, patent-pending vehicle kit with an integrated 10-watt speaker, a simple slide-in connection sleeve for the SD7 Handset, and an external antenna connection for connecting an antenna. This allows for an in-vehicle experience for the user that is similar to that from a traditional land mobile radio (LMR) device.
Additional in-vehicle devices include the Uniden® UV350 4G/LTE, which is an in-vehicle communication device designed specifically for professional vehicles such as trucks, vans, buses, emergency service vehicles and other enterprise vehicles. Also included in this segment is Real Time View which is an advanced camera management and visual monitoring system that provides customers with a real time viewing and notifications solution for their fleet vehicles which could include ambulances, buses, and trucks.
Cellular Boosters
The company’s third product category is the cellular signal booster market. Siyata’s cellular booster kits address weak cellular signals for failsafe phone calls, texts, and fast uninterrupted streaming service. Siyata’s multiple lines of cellular boosters cater to several verticals including Enterprise, Commercial, First Responder and Consumers. Siyata’s booster suite of products are used both inside buildings as well as inside vehicles. The main market for this product line is in North America where the boosters are sold under the Uniden® brand name.
Based on strong revenue generation in the 1st quarter of 2023, which was above expectations, we increase our 2023 revenue estimates to $12.2 million and adjust our 2023 EPS estimates to a loss of ($0.19). We believe Siyata Mobile is on track to generate strong double-digit revenue growth rates going forward. We expected overall gross margins to increase steadily from current levels as volume levels increase.
Our primary valuation tool utilizes a Discounted Cash Flow (DCF) process and incorporates a relatively high discount rate to account for uncertainties in the timing of the company achieving net profitability. We believe that revenue growth rates could average 20%-22% over the next 10 years and that consolidated gross margins could reach 35% by 2026.
Under this scenario, we arrive at a price target of $0.75 for SYTA stock.
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