November 5, 2021 -- InvestorsHub NewsWire -- via Hawk Point
Media --
Benzinga
iQSTEL Inc.’s (OTCQX:IQST)
market cap of $62M is absurdly low. In fact, 2021 revenues, if they
continue on the current trajectory, could surpass the entire market
cap by the end of the year. So, why the disconnect? There’s a
relatively simple answer. IQST is under the radar of most and lacks
institutional coverage provided by pay-to-play analysts. Still,
that’s not entirely bad news. With value staring investors in the
face, it also exposes the opportunity to invest in a rapidly
growing diversified company at relatively ground floor prices.
Better yet, investors would be buying into a company in a
hyper-growth mode whose value proposition is made strong from
revenue streams from partnerships involving companies as small as
micro-caps to Fortune 500 behemoths. The better news is that
momentum is on its side. Last month, IQST reported another robust
revenue update and confirmed guidance to potentially surpass $60
million in revenues by the end of 2021.
The most important part of that update is that IQST is expanding
its business interests rapidly and efficiently. Its recent
financials proved that point.
Rapid Growth, Accretive To Balance Sheet
In fact, IQST’s most recent financials not only show a company
in motion but one that is positioned for potentially exponential
growth. The company is entirely debt-free and, more importantly,
eliminated all toxic debts, convertible loans, and warrant
obligations. Moreover, beyond strengthening its balance sheet, that
accomplishment positions them ideally to uplist to the NASDAQ
markets as early as Q1 of next year. That’s their
intention.
But more than debt was eliminated. From an assets perspective,
IQST increased those by about 33% to roughly $7.4 million. Even
better, while IQST did sell some equity to accelerate its strategic
initiatives, the dilutive consequence should have less impact than
many might expect. In fact, IQST’s shareholder equity actually
increased over the first half of the year by nearly $6 million,
reaching positive equity in the process.
Now, with those accomplishments booked, IQST’s next initiative
is to capitalize on a strengthening global telecom, Fintech, and EV
market to increase its margins. And as global markets recover from
a debilitating pandemic, they are ideally positioned to accomplish
that goal.
And if they can do so, expect share prices to surge sooner
rather than later. Keep in mind, they already have the assets in
place to drive operating margins higher by maximizing the value of
its subsidiary interests.
Maximizing Subsidiary Value Through
Cross-Selling
That’s happening now. IQST management is actively reorganizing
its subsidiary operations to capitalize on overlapping market
opportunities where the services of one subsidiary can be sold into
the existing customer base of another and vice versa. That mission
drives revenues and makes income more impactful by reducing
subsidiary redundancies to achieve operational efficiencies and
improve operating margins.
Success in doing so may cause history to repeat. In 2020,
investors responded enthusiastically to its expansion by sending
share prices from $0.05 to $2.00. While the price has since
retraced to the $.0.45 level, it’s important to note that the
company is better positioned operationally today compared to when
shares were appreciably higher. Further, to prepare for a more
senior market listing, IQST has also enhanced its public reporting
standards by implementing an independent board of directors, moving
from the OTC Pink reporting standard to the OTCBB, and then
recently to the OTCQX. Thus, on all fronts, IQST is laying the
groundwork to justify its expected surge.
But, having the pieces in place is one part of the equation.
They are also putting the substantiating evidence front and center
to prove the current valuation disconnect. And rather than spend
2000 words providing that information, a simple click to its SEC
filings provides all the necessary information to indicate that
IQST has outgrown its current valuation. It presents a bullish case
for investment consideration.
And while there’s plenty in those filings, there’s more to like
from a near-term catalyst perspective.
Planned NASDAQ Uplist
The most important catalyst in the coming weeks may have more to
do with its planned NASDAQ uplist than with record-setting
revenues. Indeed, it could generate substantial interest and open
the investment opportunity to an entirely new investor class.
Remember, many brokerage houses exclude trading in many OTC stocks.
And while IQST trades on the QX, there are still some limitations.
An uplist removes those barriers.
Moreover, if they get approved, expect that its current 1X
expected 2021 revenues multiple will be met with broad investor
interest. An update on margin expansion could add an additional
multiple as well. Here’s better news. It wouldn’t be surprising to
see a definitive NASDAQ uplisting announcement during Q1 2022 after
the company publishes its audited annual report. There’s still more
to like.
Another catalyst could come ahead of its listing application if
IQST announces entering a relationship with a sponsoring investment
bank for the planned uplisting. An announcement on that front
could, in fact, be imminent. Historically, news of that nature has
a significant impact on company valuations.
Seizing Short And Long-Term Opportunity
Thus, IQST is attractive to both short and long-term traders.
And while a perfect storm of business opportunity supports the
long-term perspective, an appreciable increase in share price could
come sooner from IQST having less than 150 million shares
outstanding, no convertible debt on the books, and $60 million in
audited annual revenue anticipated to be reported for
2021.
Moreover, if IQST does announce a relationship with a sponsoring
investment bank, IQST’s share price could reach the minimum listing
requirement without a recapitalization. That is not only likely but
also would represent a more than 100% increase from current levels.
Hence, with momentum at its back and several potential catalysts
ahead, IQST stock at these levels may present a timely proposition.
Better still, acting on that consideration takes advantage of an
apparent and massive valuation disconnect.
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Source - https://www.benzinga.com/pressreleases/21/11/ab23851289/iqstel-inc-has-catalysts-on-deck-that-expose-a-valuation-disconnect-of-roughly-100-heres-why-that
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SOURCE: Hawk Point Media
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