OxySure Systems, Inc. (OTCQB: OXYS), a medical technology company that focuses on the design, manufacture and distribution of specialty respiratory and medical solutions, has made a lot of progress signing new distributors and growing its top- and bottom-line financial results over the past few months. Despite management’s strong performance, the stock remains significantly undervalued by many measures as highlighted in a recent research report.
Taglich Reiterates $2.10 Target
Taglich Brothers, a full service brokerage firm specializing in the micro-cap segment of the market for publicly traded securities, began its coverage of OxySure Systems on July 24, 2013 with a 12-month price target of $2.10. On December 9, 2013, the research firm issued an update that reiterated this price target and updated some of its financial projections given management’s better-than-expected performance in the fiscal third quarter of 2013.
According to the research update, “We value the stock at 7X estimated 2017 revenue per share of $0.63, a target of $4.40, which we have discounted by 25% to a year-ahead value of $2.10...” Our target is based on an estimated 29 million shares outstanding in 2017, reflecting shares, warrants and options outstanding as of September 30, 2013, as well as shares issued in connection with additional borrowing through 2015.”
Taglich Brothers expects OxySure Systems’ revenues to ramp up from about $1.9 million in FY2013 to approximately $4.9 million by FY2015. While it expects the company to sustain a net loss during FY 2015, the analyst believes the increase in revenues could create a positive cash flow by the end of FY2015, creating a potential catalyst for the stock.
Strong Third Quarter Results
OxySure Systems reported third quarter revenues that increased 428% to $545,820 and a net loss that decreased 38.3% to $82,613 or $0.00 per share. Shareholders’ deficit also improved more than $2 million due to assets expanding faster than liabilities. These trends look likely to continue into next year after it signed a new agreement with a Chilean distributor and indicated several other agreements were in the works following its Medica 2013 Trade Fair.
"Our results for the third quarter reflect our continued success at executing on strategic initiatives aimed at generating superior top-line growth while staying focused on controlling our expenses,” said CEO Julian Ross in the company’s third quarter earnings press release. “We plan to continue our strategy of building awareness for our new and innovative lifesaving products while investing in branding, distribution, R&D and sales.”
In a 10-Q filing with the SEC, OxySure Systems announced additional achievements during the quarter including significant progress in obtaining CE Marking in the E.U., new distributors in the U.S., and significant progress on its teaming agreement for the U.S. military. The company’s new leasing program with LeaseQ and new product additions, including its double-wall cabinet, also have the potential to contribute to its revenue moving forward.
Potential Investment Opportunity
OxySure Systems has multiple strategies at its fingertips to reach its true market potential that its management team has been diligently pursuing over the past few quarters. These efforts could culminate in both increased market penetration in its core markets and new revenue opportunities from new products, new end markets, and enhanced reimbursements from private and public agencies throughout the U.S., and eventually, the E.U. and international markets.
Taglich Brothers analyst Juan Noble recently reiterated his $2.10 per share price targeted based on the success of these strategies – a 173% premium to its December 13, 2013 price. However, the company’s real potential will be when the technology appears in Procter & Gamble’s (NYSE: PG) manufacturing facilities or Strayer Education’s (NASDAQ: STRA) school campuses alongside AEDs manufactured by companies like Johnson & Johnson (NYSE: JNJ).
- Company Website
- Investor Presentation
- Analyst Research Report
- Recent Quarterly Report
- Recent News Clip: OxySure Saves Baseball Player
- Matt Lauer on Today Show: Kylee Shea Interview
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