NEW YORK, NY / ACCESSWIRE / April 13, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has issued a company update on Net Element, Inc. (NASDAQ: NETE).
The note is available here: NETE April 2016 Update Note. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
"The company reported high growth during the year, with revenues coming at $40.2mn versus $21.2mn in 2014. This was slightly ahead of our estimate of $39.5mn in revenue for the year. While a portion of NETE's growth ($3.8mn) came from the acquisition of PayOnline, an online payment provider targeting emerging markets, the overall trend for the company was that of rapid growth and new product expansion. We find this impressive considering that NETE was facing significant corporate financing distractions throughout the year due to a toxic financing, which has since been eliminated from the balance sheet," commented Ajay Tandon, CEO of SeeThruEquity.
Additional highlights of the note are as follows:
NETE revenues climb by 89.5% in 2015
Even amidst a balance sheet restructuring was able to grow NETE revenues 89.5% in 2015. For the year, revenues came in at $40.2mn. This was slightly ahead of our estimate of $39.5mn well above revenues of $21.2mn in 2014. While a portion of NETE's growth came from the acquisition of PayOnline ($3.8mn from a partial year of consolidated results), the overall trend for the company has been one of high growth and expansion, which continued in 2015.
Revenues climb in all segments; outlook for growth in 2016
NETE reported strong topline performance across all three business segments: North American Transactions, Mobile Solutions and Online Solutions. In its North American Transaction segment, which represents 68% of revenues, NETE achieved 41% YoY growth, with strength coming from value-added services for small-to-medium business (SMB) customers. Online Solutions, which consists of the recently acquired PayOnline unit, had $3.8mn in revenue in a partial year of results. Mobile Solutions turned in $9mn in revenue, due to the impact of its branded offerings launched in 2015. NETE should see nice growth Online Solutions, give that 2016 will be the first full year of results, and we also expect strong growth in Mobile Solutions, which increased transactions processed by 106% in 2015. In NA Transactions, NETE management guided to double-digit growth in 2016 in its NA Transactions segment.
Balance sheet improving, expect reverse split
NETE continued to work on its balance sheet, ending the quarter with approximately $1mn in cash and $4mn in debt. The company eliminated the toxic convertible preferred stock, which plagued shares throughout 2015, in December. Management stated on its earnings call that it had been increasing its stake in the company, which we see as an incremental positive. We continued to expect NETE to execute a reverse split to maintain its NASDAQ listing.
Price target moves to $1.50
We are updating our price target to reflect the reality that shares have increased at a faster pace than we forecast in our initiation of the company and when we first calculated the price target. The new target of $1.50 represents a market capitalization of $169.5mn, a valuation of 2.9x our 2016E revenue estimate of $57.6mn. We continue to see NETE as an intriguing high risk / high reward growth company in the financial technology space.
Please review important disclosures on the company's website at www.seethruequity.com.
About Net Element, Inc.
Net Element (NASDAQ: NETE) is a global payments-as-a-service, technology provider with an integrated mobile and transactional services platform serving millions of emerging market clients. Its wholly owned subsidiary, TOT Group operates Unified Payments, a U.S. focused transaction processing and value-added services brand, Aptito, a next generation, cloud-based point of sale payments platform and TOT Money, a leading mobile payments service provider that is gaining significant traction in the mobile payments market in Russia and for two consecutive years, has been ranked in the Top 3 mobile payments providers by Beeline, Russia's second largest telecommunications operator.
Further information is available at www.netelement.com.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
info@seethruequity.com
SOURCE: SeeThruEquity
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