Business News Update
Siyata Mobile Inc. SYTA completed a public offering of 8.7 million shares sold with common warrants. Combined effective offering price of $2.30 with net proceeds of approximately $18 million. Offering rationale is to fund growth and working capital, namely for the SD7 new product launch. Company now has approximately $20 million cash and $15 million net cash.
We raised our 2022 or 2023 revenue forecasts to reflect SD7 orders news. However, we lowered our price target valuation to $6 from $10 to reflect the large increase in share count and dilution.
We estimate breakeven adjusted EBITDA profitability in late 2022 for a re-rating of the stock.
Importantly, we now believe that Siyata Mobile is adequately funded for the next 12-18 months to support SD7 working capital and inventory for the launch, other growth initiatives and absorb minor net losses near-term.
Initial Orders for the SD7 device received in early December total more than $1.8 million for customers in the US and EMEA. We remain optimistic about the revenue potential from the SD7 launch for 2022 & 2023 topline.
We remind investors that Motorola Solutions (MSI) entered into a partnership agreement with Siyata Mobile for the launch of the new SD7 handset.
Factoring in news of order wins in December, we raise our SD7 revenues forecast to $5 million for 2022 (from $4 million prior) based on $300 pricepoint for 3.5% market share achievement in North America & Europe. $10 million revenues for 2023 (from $8 million prior).
We value Siyata Mobile using a peer comparables valuation methodology based on EV/Sales for 2022 and 2023 estimates. We typically prefer EV/EBITDA, P/E & P/FCF multiples, but this company has not achieved positive adjusted EBITDA on an annual basis. We forecast positive adjusted EBITDA in 2023.
We reach $6.00 stock price by applying the peer group average of 2.6x EV/Sales 2022 to the blended average of our 2022 & 2023 sales forecasts for SYTA (to factor in a full year of SD7).
Stock is trading at 1.2x our 2022 Sales estimate for a 55% discount to the peer group average. This large discount appears unwarranted and could narrow if the company executes well on revenue growth and gross margin expansion in 4Q21 and 2022. Cash balance is strong enough to fund its growth and working capital needs.
We used 13.7 million share count to factor in the recent public offering of new shares. We are not counting possible dilution from warrants or stock options with exercise prices far out-of-the-money.
Net Cash position of approximately $15 million as of 1/12/22 after factoring in the recent net proceeds of the deal raise (approximately $18m). We applied $15 million Net Cash to our price target and Enterprise Value calculations. Rather than $3 million Net Debt of 9/30/21 from its last balance sheet filing.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.