GOGO Inc: Long Term Potential Upside Proven By Management's Updated Guidance

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GOGO Inc: Long Term Potential Upside Proven By Management's Updated Guidance

 

October 19, 2021

Price (as of close on October 19, 2010)

$16.70

 

Rating

BUY

 

12- Month Target Price

$20.00

 

 

Gogo Inc. (GOGO)

Based on management’s recent updated guidance, we are revising our estimates higher. We increase our target price to $20.00 per share (earlier $18.00) and maintain our Buy rating.

 

gogo oct 2021

 

 

Long-Term Financial Update

➢ Through 2025, management revised their expected compound annual growth rate of revenue to be 15% from 10% previously.

➢ Management is now targeting 2023 free cash flow to be $125 million ($100 million previously). GOGO is also forecasting free cash flow in 2025 to be $200 million.

➢ The Company also revised their adjusted EBITDA margins from 35-40% to 40-45% which matches our original investment thesis.

➢ By 2025, management assumes only 47% of North American business aircraft will be connected with in-flight connectivity, still representing a large unsaturated market.

➢ GOGO’s AVANCE platform combined with their OEM manufacturer relationships are the key to their success in that GOGO provides a superior product with superior customer experience.

➢ We increase our estimates based on management’s long-term financial update and their commentary. We maintain our Buy rating and increase our target price to $20.00, implying a price appreciation potential of 20%.

 

RISKS

➢ Potential entry from SmartSky (their closest competitor) could cause GOGO to spend more on customer acquisitions or force GOGO into a price war.

➢ Low Earth Orbit (LEO) satellite companies may have lower than expected margins in a partnership with GOGO, may not partner with GOGO or may take customers from GOGO.

 

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Armada Hoffler Properties: Strong Industry Dynamics Coupled With Strong Management Indicate Upside Potential

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Armada Hoffler Properties: Strong Industry Dynamics Coupled With Strong Management Indicate Upside Potential 

 

October 15, 2021

Price (as of close on Oct 14, 2021)

$13.70

 

Rating

BUY

 

12- Month Target Price

blocked

 

Armada Hoffler Properties Inc. (AHH)

Armada Hoffler Properties is repositioning its portfolio for growth and represents an opportunistic way to play a reopening trade. AHH’s diversified portfolio with high occupancy rates, coupled with strong industry dynamics and a healthy development pipeline, should result in a growing NAV and stock price. In addition, AHH’s dividend yield of 4.7% is attractive. We initiate with a BUY rating and a blocked price target.

ahh oct 2021

 

Investment Thesis

Armada Hoffler Properties is a self-managed REIT with four decades of experience in developing, acquiring, and managing high-quality office, retail, and multi-family properties.

The stabilized property occupancy rate for AHH was 94.1% as of Q2:21, which reflects AHH’s high-quality portfolio.

We are encouraged by a strong development pipeline which should support NOI growth. AHH expects its portfolio NOI to climb by over 40% from 2020 levels when current development projects are fully stabilized.

A diversified portfolio with high occupancy rates, coupled with strong industry dynamics and a healthy development pipeline, should result in a growing Net Asset Value (NAV) and stock price. In addition, the dividend yield of 4.7% is attractive.

The Company is poised to grow its earnings over the near to medium term. We initiate coverage with a BUY rating and a price target of blocked.

 

PRIMARY RISKS

The Company is dependent on timely completion of its development projects. Failure to remain on schedule can lead to cost overruns, which can impact profitability.

The Company is dependent on external capital to fund its asset purchase. There is risk of dilution from any future equity offerings.

 

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Esports Entertainment: Mispriced And Misunderstood Future By The Market Equates To Potential Upside

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Esports Entertainment: Mispriced And Misunderstood Future By The Market Equates To Potential Upside

 

October 21, 2021

Price (as of close on October 20, 2021)

$6.28

 

Rating

BUY

 

12- Month Target Price

blocked

 

 

Esports Entertainment (GMBL)

Esports Entertainment delivers 63% sequential revenue growth during Q4:21 and guides for FY:22 revenues exceeding $100 million. We reiterate our Buy rating and  blocked price target. 

gmbl oct 2021

 

FY:21 Highlights

 ➢GMBL operating esports gaming platforms, event venues and owns proprietary esports infrastructure and technology. The eSports gaming market is valued at $750 million and projected to grow to $3 billion over the next five years.   

➢ Q4:21 revenues improve 63% sequentially to $8.8 million and GMBL delivers full-year revenues of $16.8 million via a combination of acquisitions and organic growth.     

➢ GMBL closed the acquisition of Bethard during the June quarter, which gives the company gaming licenses in Sweden and Spain and adds roughly $30 million to annualized revenues. Over the past 12 months the company has closed six significant acquisitions, including Bethard, Lucky Dino, ggCircuit, Helix, FLIP, EGL and Argyll.       

➢ The company has opened and is staffing a New Jersey license in anticipation of securing its New Jersey gaming license. Ohio is the next state where GMBL plans to apply for a license and several additional states are targeted for 2022 as well as the Canadian province of Ontario. 

GMBL is guiding for Q1:22 revenues ranging from $16-$16.5 million and FY:22 revenues exceeding $100 million. We reiterate our Buy rating and blockedblockedblockedblockedblockedblockedblockedblockedblocked

 

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Singular Research's Private Client Webinar 10/27 at 9am PDT

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Wednesday, October 27 at 9 am PDT

 

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Join us for a private client webinar with CEO Kevin Mills of Socket Mobile, Inc. (SCKT) on Wednesday, October 27 at 9 am PDT. There will be a chance for 1 on 1s with Kevin Mills from 10 am to 12 pm PDT. 

Socket Mobile is a leading provider of mobile data capture solutions. Its products include stand- alone barcode scanners, attachable barcode scanners, and RFID/NFC readers/writers. The primary end markets for its solutions are retail, commercial services, logistics, and healthcare. The Company announced strong Q2:21 results, delivering its fifth consecutive quarter of operating profitability. Revenue rose 119% YOY. Management expects growth to remain strong in the near term led by retail as the economy re-opens. We increase our target price to $9.50 per share (earlier $7.75) and maintain our rating at Buy.

Singular Research's Private Client Webinar 10/27 at 12pm PDT

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Wednesday, October 27 at 9 am PDT

 

 

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Join us for a private client webinar with CEO Kevin Roycraft of Adams Resources & Energy, Inc. (AE) on Wednesday, October 27 at 12 pm PDT. There will be an opportunity for 1 on 1s with Kevin Roycraft from 12:30 to 3 pm PDT.

Adams Resources & Energy is primarily engaged in the business of crude oil marketing, transportation, and storage, and tank truck transportation of liquid chemicals and dry bulk through its two wholly owned subsidiaries GulfMark Energy, Inc. and Service Transport Company. Q2:21 results were strong driven by a continued improvement in the economic backdrop, including increased demand for crude oil and a higher price environment. The outlook for crude oil remains positive till 2022 which bodes well for AE. We decrease our target price to $38.50 (earlier $39.75) and maintain our rating at BUY.

Singular Research's Private Client Webinar 10/14

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Thu, Oct 14, 2021 at 9 AM PDT

 

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Join us for a private client webinar with CEO Jason Les and VP of Capital Markets Phil McPherson of Riot Blockchain, Inc. (RIOT) on Thursday, October 14 at 9 am PDT.

Riot Blockchain is the largest publicly traded cryptocurrency mining company in North America. Recent large-scale purchase orders of Antminers and the acquisition of Whinstone Mining has positioned the Company to significantly increase its Bitcoin mining hash rate. We initiate with a BUY rating and a $50.00 price target.

Socket Mobile: An Amazing Economy Re-Opening Play

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Socket Mobile: An Amazing Economy Re-Opening Play

Socket Mobile is a leading provider of mobile data capture solutions. Its products include stand- alone barcode scanners, attachable barcode scanners, and RFID/NFC readers/writers. The primary end markets for its solutions are retail, commercial services, logistics, and healthcare.

 

September 9, 2021

Price (as of close on Sep 8, 2021)

$6.81

 

Rating

BUY

 

Price Target

blocked

 

The Company announced strong Q2:21 results, delivering its fifth consecutive quarter of operating profitability. Revenue rose 119% YOY. Management expects growth to remain strong in the near term led by retail as the economy re-opens. We increase our target price to blockedblocked) and maintain our rating at Buy.

 

sckt 2q f 2021

 

Q2:21 Highlights

➢Q2:21 revenues were $5.9 million, up 119% from Q2:20 driven by strong demand in the retail industry from the re-opening of the economy following the ease of pandemic restrictions.

➢ Gross profit for Q2:21 was $3.2 million, compared to $1.3 million in Q2:20. Gross margin increased 460 bps YOY to 54.6% in Q2:21.

➢ Adjusted EBITDA was $1.2 million in Q2:21, versus a loss of $0.5 million in Q2:20 due to higher revenues and lower operating expenses (as a % of sales).

➢ Net income was $2.6 million in Q2:21 or $0.27 per diluted share versus a loss of $0.7 million or $(0.13) per diluted share in Q2:20.

➢ SCKT expects its NFC reader products to generate meaningful revenue from 2022 onward.

➢ We adjust our estimates based on the quarter end results and management’s commentary. We increase our target price to  blockedblockedblockedblocked We maintain our rating at Buy.

 

PRIMARY RISKS

➢The Company is highly dependent on application developers to integrate SCKT’s scanning products into their applications. If these applications are delayed or are unsuccessful, it could result in less business for the firm, thereby negatively impacting sales.

➢The sales are dependent on a limited number of distributors. Thus, the loss of any one distributor may have a material adverse effect on future operating results and financial conditions.

 

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NV5 Global: Strong Revenue Visibility Means Strong Price Target

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NV5 Global: Strong Revenue Visibility Means Strong Price Target

NV5 Global, Inc. is a provider of professional and technical engineering and consulting solutions in the infrastructure, energy, construction, real estate and environmental markets. The Company’s clients include the U.S. federal, state and local governments, and the private sector.

 

August 27, 2021

Price (as of close on Aug 26, 2021)

$102.34

 

Rating

BUY

 

New Price Target

blocked

 

NV5 Global, Inc. (NVEE)

NVEE reported Q2:21 revenue growth of 10.3% and EPS gains of 44%.  Backlog remains strong at $603 million, ensuring revenue visibility. We increase our target price blockedblocked and maintain our BUY rating.

nvee 2q5 aug 2021

 

Q2:21 Highlights

Q2:21 revenues increased 10.3% YOY to $179.5 million, primarily due to growth in the Infrastructure (+12.2% YOY) and Business Technology Services (+19.6% YOY) segments. The Company exited the quarter with backlog of $603 million.

➢Adjusted EBITDA increased 27% YOY to $34.2 million, while adjusted EBITDA margin increased 250 basis points to 19.1%. Adjusted EPS rose 44% to $1.34.

➢NVEE generated $6.2 million from cross-selling in Q2:21 while also securing key contract wins across all segments.

➢The Company produced $14.1 million of cash flow from operations and ended Q2:21 with cash of approximately $113 million on the balance sheet, providing plenty of funding for future acquisitions.

➢ Contracts delayed by the change in administrations are moving ahead and NVEE could be a prime beneficiary of the $1 trillion infrastructure bill making its way through the US Congress.

➢NVEE increased its 2021 revenue guidance by roughly 8% to $705-$727 million and adjusted EPS guidance by 18% to $4.20 - $4.55.

➢Taking into account strong H1:21 results and the favorable H2 outlook, we increase our price target to  blocked and reiterate our BUY rating. Our target price implies blocked for NVEE shares.

PRIMARY RISKS

➢ An economic downturn could restrict the Company’s access to capital markets and slow acquisition-related growth.

 

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