Weak markets do one thing best- create opportunities. And SOBR Safe, Inc. (NASDAQ: SOBR) is one that should be in investor's crosshairs. In fact, off of recent highs, the valuation disconnect between SOBR's near-term potential and share price presents an opportunity worthy of immediate consideration. Supporting that proposition are updates from SOBR highlighting potentially transformative groundwork laid in 2022, which could help generate an exponential revenue boost this year.
If so, the trajectory for SOBR shares could follow suit, reclaiming 52-week highs roughly 93% higher than current levels. Here's the more critical part of that consideration. SOBR is better positioned now than when it scored that mark, with several deals announced and a key hire helping to expedite targeting a combined revenue-generating and diverse market opportunity of over $12 billion.
And that's only considering recent targets SOBR provided from having a clear path to reach clients in the manufacturing and telematics markets. Factoring in the entire universe of marketability for its award-winning and innovative SOBRcheck™ technology, it's not overly bullish speculation to believe SOBR could be staring down rev-gen opportunities of over $30 billion.
Driving The Value Proposition
Still, catching value from expected revenue growth at SOBR shouldn't be the primary attraction for investors. Yes, stocks move higher on multiples of revenues. However, focusing solely on that metric and not factoring in the mid and long-term potential from SOBR's game-changing alcohol-detection technology could lead to leaving more generous returns on the table. By the way, describing SOBRcheck™ as game-changing isn't an overzealous representation. The technology earned SOBRsafe the Occupational Health & Safety 2022 New Product of the Year and Child Safety Networks Safe Family Seal of approval for Safety Monitoring Devices capabilities.
More awards could follow- financial ones, from SOBR being ideally positioned to penetrate markets faster than expected by way of legislation written more proactively than ever to protect businesses, schools, and highways from incidents and catastrophes related to over-the-limit alcohol consumption.
In turn, few will argue that SOBR is not targeting the right markets at the right time. More important, no arguments are being found saying that SOBR's alcohol-screening technology is not the correct answer to a challenging problem. And after raising capital from an at-the-market private placement navigated by Aegis Capital, it can leverage the benefits of all three to generate what many expect to be breakout growth in 2023.
Two recent announcements could accelerate that mission. The first, made in February, announced that prominent product development and manufacturing firm BGM Electronic Services, Inc. (BGM) is implementing SOBRcheck™ as its new front-line alcohol screening solution. That's big news for a couple of reasons. First, it signals SOBR's entry into the $4 billion1 U.S. manufacturing market. And secondly, it could fast-track new relationships with major auto manufacturers, including BGM clients Ford (NYSE: F), GM (NYSE: GM), and Stellantis (NYSE: STLA) (Chrysler-Fiat). Even if through BGM, the opportunity is in play, noting that during the height of the COVID pandemic, General Motors contracted BGM for the GM/Ventec/U.S. Government Ventilator Project, successfully delivering 390,000 electronic assemblies for 30,000 ventilators in just 150 days. This achievement was recognized by GM with the 2020 Supplier of the Year - Over Drive Achievement Award. BGM was recently acquired by Warren Buffet's Berkshire Hathaway, and validation there could put SOBR on a fast track to earn business from logistics and defense manufacturing powerhouses like United Parcel Service (NYSE: UPS), FedEx (NYSE: FDX), and Lockheed Martin (NYSE: LMT), companies where driver and campus safety is imperative.
A Key Hire And An Adamant NTSB
That's not all SOBR did to enhance shareholder value in February. They also hired Chris Burton for the position of Director of Commercial Development. He brings over 15 years of enterprise technology sales success and is well-connected to expedite the introduction of SOBRsafe to the $8 billion U.S. telematics market through established industry relationships, including original equipment manufacturers (OEMs) Daimler, Freightliner, Continental, and Thomas Built Buses. Telematics is the "brain" inside a vehicle that provides real-time, remote reporting on driver behavior, performance, and fitness for duty.
Tying all of that together is that the National Transportation Safety Board (NTSB) wants the best possible technology to screen for alcohol implemented sooner than later. NTSB Chair Jennifer Homendy has not minced words about the urgency in making the agency's plan the law, recently saying, "We need to implement the technologies we have right here, right now, to save lives." She said plenty more, but it's part of the same message. The legislative bodies are focused on implementing measures to protect the roads, workplaces, and people on and in them. So, why is her statement timely to SOBR and its investors?
Because SOBRsafe's passive alcohol detection platform, SOBRcheck™, can already meet, integrate, and expedite embedding the objectives the NTSB refers to. Actually, they already are, with deals to ensure driver safety for companies like Continental Services and its 1,800 employees across four states. They use SOBRsafe's innovative solution to proactively manage its existing alcohol policy while complementing existing safe operations. The other part of the NTSB statement to consider is that screening mandates are expected to be in full force by 2025,
If so, deals could snowball, with thousands of other companies needing what SOBR sells. And because SOBR offers the most efficient non-invasive alcohol-detection system, products, and platform enabling a safe environment and community, those deals could accrue faster than many expect.
That's likely. Why?
SOBRcheck Can Dominate Its Diverse Opportunities
Because SOBR's line of products is revolutionizing the alcohol detection field by blazing a trail different from its competitive field. In fact, SOBRcheck™ is nothing like traditional means of alcohol detection devices, and it requires no breath test or blood draw. Instead, it's a touch-based device and system that does more than measure alcohol volume; it reports, aggregates, and interfaces client infrastructures by connecting resources to resources with real-time reporting, which SOBR believes can forever change how companies monitor for zero-tolerance compliance.
The ease of adopting SOBRcheck™ technology into a company infrastructure is one of its most attractive features driving client interest. But beyond that, it's an easy platform to use and implement and perhaps the first and only device and system that effectively screens drivers for alcohol use via cutting-edge finger-touch technology. Often implemented at entry points at facilities, workers put a fingertip or palm on a device that generates a reading within 20 seconds. If the test detects alcohol, a report is generated, and that employee gets immediately flagged. The great news in that respect is that the person likely won't get keys to a vehicle, whether an 18-wheel truck or a forklift.
In other words, in addition to keeping roads safe, SOBRsafe targets workplace safety, too, a combination that leaves transportation and warehouse management short of reasons to not implement a system like SOBRcheck. By the way, any suggestion, if any, made that SOBRsafe readings are inconsistent is misguided.
The test is a one-on-one proposition, analyzing the natural humidity and vapor of the skin, unlike standard alcohol detection methods, which can require breath, saliva, or sometimes even blood tests. And the results SOBRcheck™ delivers are statistically impressive, scoring a detection accuracy rate of 94% compared to low to mid 80% for current breathalyzer technology. But there's more than finger-touch technology driving the value proposition.
SOBR offers additional detection devices, including the SOBRsure™ wristband, which utilizes the same touch technology but as a wearable device. This feature provides a considerable competitive advantage because it allows for testing on the go and ongoing employee management. But know this. Companies don't use SOBRsafe to micromanage employees. They only want to do the right thing, keeping intoxicated drivers off the highways and equipment. And if using SOBRcheck results in a single life saved at a company, its value extends for generations.
Thus, expect little pushback about using the SOBRcheck™ system from DUI management, school bus companies, ride-share companies, and last-mile fleet businesses. In fact, the more likely scenario is soaring demand for a best-in-class platform that saves lives, money, and property.
Partnerships Accelerating Market Penetration
Partner company Butterfield Onsite Drug Testing could accelerate that demand by immediately broadening SOBR's reach into the airline industry. Butterfield is also building a SOBRsafe sales team to represent the company to a potentially global audience. Additional working partnerships expand company coverage.
SOBR established a distribution deal with the public benefit corporation Reconnect, which aims to renovate outdated substance management systems. The SOBRsafe platform provides a centralized space for participants within the justice space to digitally record data and access management systems. Similar deals with North-Star Care, Continental Services, and RecoveryTrek also help members regulate test results, expanding SOBR's reach further. That's not all.
Partnership with the ride-share app RubiRides is another example of a practical solution to dangerous potential. Because RubiRides specializes in trustworthy transportation for kids, drivers must be reliably tested. Up to that challenge, SOBRcheck™ wristbands continually monitor alcohol-free safety, uploading data to the cloud in real time and ensuring safe driving.
A SOBR Valuation Disconnect Exposed
All tolled, the sum of SOBR's parts exposes a valuation disconnect and investment opportunity that may be too good to ignore. That case is strengthened by SOBR being better positioned today than when it traded almost 100% higher. Remember, too, SOBR isn't a conceptual stage company. They have an excellent and proven product that has earned the OSHA New Product of the Year award and the Child Safety Networks Safe Family Seal of approval for safety monitoring devices. Those accolades don't come easy.
Moreover, they expose that SOBR Safe Inc. is an industry game-changer. And more importantly, they are making deals connecting them to billions of dollars in potential revenues. Those billion-dollar revenues won't accrue to that level in 2023 but make no mistake, that's the path in play for this innovative company providing next-generation solutions to a decades-old problem.
Best of all, the value proposition in play at SOBR isn't a wait-and-see situation. They already have marketable products, technology, and management expertise to deliver value to their investors. And at the same time, they offer a platform that provides immediate and tangible evidence of keeping roads and workplaces safe.
Thus, whether an investor, a client or a civilian, expect SOBR to be a significant alcohol-screening device player in 2023. The great news about that- everybody can win.
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