November 23, 2020 -- InvestorsHub NewsWire -- via Goldman Small
Cap Research - Rob Goldman - rob@goldmanresearch.com
IQSTEL, INC.
Great Q, New LOIs Affirm Thesis: IQST
Shares Grossly Undervalued
IQSTEL, INC. (OTC – IQST - $0.085)
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Industry: Communications, FinTech Services |
6-Mo. Price Target: $0.54 |
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COMPANY SNAPSHOT
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INVESTMENT HIGHLIGHTS
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iQSTEL Inc (OTC:
IQST) is a US-based publicly-listed company offering
leading-edge Telecommunication and Technology Services for Global
Markets, with presence in 13 countries. The company provides
services to the Telecommunications, Financial Services, Liquid Fuel
Distribution and Electric Vehicle (EV) Industries. iQSTEL has 3
Business Divisions: Telecom, Technology and Fintech, with worldwide
B2B and B2C customer relations operating through its subsidiaries:
Etelix, SwissLink, QGlobal SMS, SMSDirectos, IoT Labs, and
itsBchain. The Company has an extensive portfolio of products and
services for its clients: SMS, VoIP, 4G & 5G international
infrastructure connectivity, Cloud-PBX, OmniChannel Marketing, IoT
Smart Gas Platform, IoT Smart Electric Vehicle Platform, Mobile
Number Portability Application MNPA (Blockchain), Settlement &
Payments Marketplace (Blockchain), Visa Debit Card, Money
Remittance, Pay Mobile Phone Services among others.
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KEY STATISTICS
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Price as of 11/20/20 |
$0.085 |
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52 Wk High - Low |
$0.5174 - $0.03 |
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Est. Shares Outstanding |
78.2M |
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Market Capitalization |
$6.6M |
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30-Day Average Volume |
2,654,378 |
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Exchange: |
OTCPK |
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COMPANY INFORMATION
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IQST Hitting on All Cylinders. IQST
appears primed to again reach its recent share price peak of
$0.137, which was recorded shortly after our coverage initiation
three weeks ago. IQST announced a strong third quarter, great start
to Q4, and topped it off with two new LOIs that could result in a
higher valuation category sooner than later.
The Q. IQST reported 3Q20 revenue of
$13.3M as compared with $4.2M in the year-ago period, a 216%
increase! This performance takes revenue for the first nine months
of 2020 to the $29.4M mark. With revenue of $5.1M for the month of
October, its current run-rate would put full-year revenue results
well ahead of our $42M estimate—clearly a potentially bullish
event.
Fintech Drives Revenue and Valuation. Last
week, IQST announced it signed an LOI which in effect launches its
consumer fintech category. Preliminary estimates suggest revenues
of $45-$128M over 5 years with EBITDA margins of 30-40%. Achieving
these metrics could affirm IQST as a meaningful fintech player and
could have a major impact on its valuation and stock price.
Innovative Internet of Things (IoT) for Electric Vehicle
(EV) LOI. Furthering its IoT development and
VoIP/Fintech reach in Africa, IQST entered
into an LOI to codevelop IoT two-way device communication solutions
specific to the EV operating environment.
Reiterate our $0.54 price target. With its
core business ahead of forecasts and business development
accelerating its initiatives, we affirm our target price and
project a marked share volume increase in IQST as well.
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THE LOIs HAVE IT
Management clearly desires to increase its reach in fintech to
both foster cross-sale opportunities with its downstream partners
and direct consumer customers. This planned strategic move
dramatically increases gross and operating profitability which in
turn positions IQST as a combination of a communications and
fintech services provider, thus potentially leading to a valuation
that is many times greater than its current market cap.
The Company’s recently entered into an MOU agreement with
Payment Virtual Mobile Solutions, LLC (PayVMS) to build a Prepaid
Debit Card Service (PDCS). The new PDCS will be constructed under a
new corporation named Global Money One, Inc. (www.globalmoneyone.com). iQSTEL will own 75% of Global
Money One, Inc. with PayVMS owning the other 25%. Management stated
that the PDCS serves as the launchpad for its consumer fintech
operations. Given the early anticipated basket of services, we
believe the projected $45 - $128M in revenue over five years is
very achievable. we believe that additional services beyond that
should consistently generate 30-40% EBITDA margins, depending upon
the services mix. PDCS is expected to enable customers to make
purchases in stores and online, withdraw cash at ATMs or receive
cash back when using it to make a purchase, recharge prepaid mobile
phone service (domestic and international), and send money
domestically or internationally. PDCS is expected to also
facilitate the deposit of funds into bank accounts, rewards and
digital gift cards. In addition, PDCS customers are expected to be
able to execute bill payments and remote deposit capture (RDC) by
mobile phone.
Separately, IQST and Alternet Systems, Inc.
(OTC-ALYI-Spec Buy), an electric vehicle (EV) innovator,
announced a letter of intent (LOI) agreement for IQST's Internet of
Things (IoT) development team to combine efforts with ALYI's EV
engineering and design program to codevelop IoT two-way device
communication solutions specific to the EV operating environment.
ALYI's first generation EV is an electric motorcycle, designed for,
among other applications, utilization within the rideshare
(exemplified by Uber and Lyft services) sector
in Africa evolving the prevailing robust motorcycle taxi
market. IQST subsidiary IoT Labs
MX specializes in IoT design and development to include
wireless and vehicle telematics space that provide telematics
solutions. IoT Lab MX, among other products, has developed the IoT
Smart Gas Platform. IoT Labs MX and MODUS plan to work jointly to
develop two-way device communication in the Revolt Electric
Motorcycles with, among others, the following functions:
- Geolocation
- Battery Management
- Theft and Accident Interfacing with Emergency Services
- Remote Maintenance Management
- Vehicle Body and Component Leasing Management
- Driver and Passenger Personal Mobile Device Interface
- Rideshare System Interface
In the near term, we expect that future monthly interim revenue
results and progress in converting the LOI into full-scale projects
will serve as key milestones to potentially drive IQST’s shares
higher. With the stock already trading above its 50 and 200 Daily
Moving Averages, and the average daily volume more than 4x higher
than a month ago, we believe IQST’s stock offers upside for both
fundamental and momentum microcap investors.
RECENT TRADING HISTORY FOR FDIT
(Source: www.StockCharts.com)
Senior Analyst: Robert Goldman
Rob Goldman founded Goldman Small Cap Research in 2009 and has
over 25 years of investment and company research experience as a
senior research analyst and as a portfolio and mutual fund manager.
During his tenure as a sell side analyst, Rob was a senior member
of Piper Jaffray's Technology and Communications teams. Prior to
joining Piper, Rob led Josephthal & Co.'s Washington-based
Emerging Growth Research Group. In addition to his sell-side
experience Rob served as Chief Investment Officer of a boutique
investment management firm and Blue and White Investment
Management, where he managed Small Cap Growth portfolios
and The Blue and White Fund.
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