NEW YORK, NY / ACCESSWIRE / Decemeber 12, 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 December 2016 Update Note.
Highlights of the note are as follows:
- 3Q16 revenues grew by 10% YoY to reach $14.0mn, versus $12.7mn in 3Q15
- Revenue was driven by the performance of the company's largest segment, NA Transactions, which experienced revenue growth of 40%+
- NETE reported a non-GAAP, management-adjusted loss of ($2.7mn) during 3Q16, or ($0.20) per share, versus ($2.9mn), or ($0.42) per share, in 3Q15 on the same basis.
NETE revenues up by 55% in first nine months of 2016
NETE reported double-digit top line growth in 3Q16, with revenues rising 10% to reach $14.0mn, versus $12.7mn in 3Q15. For the first three quarters of 2016, revenues rose by an impressive 55%, reaching $39.0mn, versus $25.1mn in in the prior year period. NETE's growth in came primarily from its NA Transactions segment, which benefitted from more small and medium-sized merchants using its payment processing system. In 3Q16, NA Transactions comprised 80% of NETE's revenue base, and contributed revenues of $11.2mn, up 44% YoY. For the first nine months of the year, NA Transactions were $29.4mn representing 76% of revenues and well ahead of $19.3mn in the corresponding prior year period.
Balance sheet helped by 10mn stock purchase agreement
NETE ended the quarter with cash on hand of $1.4mn and total assets of $23.4mn. The company had total liabilities of $16.8mn, including $4.2mn of financial debt. We continue to see the balance sheet as an area to watch for NETE, as access to capital has been a swing factor in the performance of the stock. Additionally, NETE is managed for growth, and requires capital to fund its aggressive growth strategy until it reaches a scale that throws off cash on a recurring basis. The company recently announced a $10mn stock purchase agreement with ESOUSA Holdings, LLC, which may provide liquidity in coming months.
Price target moves to $2.45
We are our updating our price target for NETE following 3Q16 results and an updated share count, as this is our first note after the reverse split. We see the company as offering compelling value at recent prices, especially in light of the growth generated by the company. At the recent price of $0.84, NETE shares have a market capitalization of approximately $13mn, versus our 2016E revenue estimate of $53.6mn. 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
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry's most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.
For more information visit www.seethruequity.com.
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SOURCE: SeeThruEquity