The Dow Jones Industrial Average slid Monday following a losing week, as traders weighed a rise in yields to multiyear highs. The 30-stock Dow lost 127 points, or nearly 0.4%. The S&P 500 hovered just above the flatline, gaining 0.2%, while the Nasdaq Composite advanced 0.9%. The benchmark 10-year Treasury note yield hit a high of 4.35%. That’s its highest level since November 2007. One stock that we would like to draw your attention to is Siyata Mobile (SYTA) and here’s why.
On August 14th, Siyata Mobile (NASDAQ:SYTA) reported its Q2 2023 financial results, painting an optimistic picture of the company’s trajectory. The rugged handset business, spearheaded by the SD7, displayed a notable growth rate in sales, paving the way for a potential market dominion in the upcoming quarters.
1. **Revenue Surge**: Siyata Mobile posted revenues of $2.7 million, a noteworthy ascent from the $0.97 million in Q2 2022. The SD7 model’s sales at $1.9 million were the key drivers, despite a slide in sales from legacy products and boosters.
2. **Profitability**: Gross profit witnessed a climb, resting at $804,490 (29.7% gross margin). This is a sharp increase from the prior year’s $108,673 (11.2% gross margin). The elevated profit margins owe largely to the SD7’s high-margin sales.
3. **EBITDA & Net Loss**: Adjusted EBITDA stood at ($2.0) million, showing signs of recovery from the ($3.4) million of the previous year. The net loss was reduced to ($2.3) million from ($4.3) million in Q2 2022.
4. **Financial Position**: As of June 30, 2023, Siyata had a cash balance of $2.0 million and a robust working capital of $3.7 million. The company also made strides in equity capital raising, amassing $5.85 million over two quarters, and executed a 100-1 reverse stock split.
CEO’s InsightMarc Seelenfreund, CEO and Founder, commented on the outstanding growth, underlining a 180% YoY increase in revenue due to the accelerating adoption of the SD7 solution. “Given our performance in the first half of the year and our expanding sales pipeline, we are increasingly optimistic that 2023 will be a strong growth sales year for Siyata,” he noted.
**Recent Business Endeavors**
Siyata Mobile has fortified its distribution network by partnering with prominent North American carriers. This expansion, including ties with KPN Royal Dutch Telecom, cements the company’s foothold in the European market. Several other business developments throughout 2023, from new product announcements to strategic collaborations and participation in events, reiterate Siyata’s aggressive stance in the market.
**Valuation and Future Outlook**
Considering the Q2 results and management insights, the adjusted 2023 revenue estimate is projected at $11.2 million. The EPS for 2023 is estimated at a loss of ($17.70), accounting for the reverse stock split. For 2024, revenues are expected to be around $20.0 million with an EPS loss of ($2.35). Based on a Discounted Cash Flow (DCF) model and anticipating steady increases in volume levels, it’s predicted that Siyata Mobile will witness consistent double-digit revenue growth in the forthcoming periods.
The future for the company looks promising with a potential average revenue growth rate of 20%-22% over the next decade and consolidated gross margins potentially touching 35% by 2026.In conclusion, Siyata Mobile’s Q2 2023 results are testament to its resilience, operational efficiency, and the burgeoning demand for its rugged handset business. The company appears to be well poised to solidify its position as a leader in the mobile handset market in the coming years.
Meanwhile, some of the stocks making moves mid day on Monday included: Palo Alto Networks (PANW) surged 15.2% post stellar earnings, with Goldman Sachs reiterating a buy status. Earthstone Energy (ESTE) spiked by 13% upon news of Permian Resources acquiring it in a $4.5 billion all-stock deal, while Permian’s shares remained stable. Nvidia (NVDA) shares rose 4.7% after HSBC’s buy rating reiteration and Baird’s strong recommendation, with its earnings set for release soon. Napco Security Technologies (NSSC) plummeted by 41% after revealing financial statement errors. Chinese EV maker, Xpeng (XPEV), leaped 9.8% due to an upgrade by Bank of America, backed by its strong partnership with Volkswagen. Tesla (TSLA) rebounded by 5.1% after the previous week’s decline driven by price cuts in China. VMWare (VMW) and Broadcom (AVGO) saw increases of 4.2% and 2.3%, respectively, with Broadcom nearing the acquisition of VMWare after getting the green light from the UK’s Competition and Markets Authority. Farfetch (FTCH) shares rose by 5%, attempting to recover from a 45% drop after reporting disappointing revenue figures. Lastly, Acushnet Holdings (GOLF) climbed 3.3% following Jefferies’ upgrade, foreseeing the company maintaining its leading position while enhancing its growth and margins.
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