Read stocklook's blog in RSS
December 21, 2009
Share This
Current Price $0.75
52 week range 0.15 - .99
Market cap 60.68
P/S 1.2
P/B 3.6
5 Year average
P/S 3.9
P/B 7.8
5 year target price
$2.2
Introduction
I happened to stumble across WidePoint while using a stock screener. The numbers looked interesting, so I then continued to evaluate WYY’s business plan and noticed it was relatively simple with only three operating segments. They derive the majority of their revenue from the federal government, but have a growing private sector consulting segment. WidePoint also sees a growing need at the state and local government level and could capitalize on this growing need and opportunity.
Overview
WidePoint is the leading provider of certificate-based security solutions and mobile telecom expense management systems to the federal government.
Provides reoccurring revenue products targeting unexploited multi-billion dollar markets.
WidePoint intends to continue significantly expanding its revenue base by growing, acquiring and cross-marketing emerging but proven public-sector technologies that have a high probability of wide scale adoption in the commercial sector.
WYY maintains numerous contract vehicles, major government certifications, key IT partnerships and a top secret security clearance
Last quarter
Recent News
Q3 2009 net income of $515,000 vs. net loss of $335,000 last year
Revenue growth of 28% YOY
Increase gross margin 24% vs. 17% YOY
Management Outlook for this current quarter
Expect double digit growth in all three operating segments
Fourth consecutive quarter of net income and three quarters of EPS growth for next quarter
Opportunities within Mobile Telecom Managed Services continues to look promising in the federal sector
Pleased to see development at the state and local municipal market
Expect the programs and our affiliations with our partners to further support and widen our sales reach and long-term growth.
Telecom Managed Services segment was up 28% on revenue of nearly $6.8 million for the quarter.
The PKI Credentialing and Managed Services segment recorded a 34% revenue increase to almost $1.6 million
Consulting Services segment was up 26% to $3.0 million for the quarter
This was the result of both new contract awards and renewals along with expansion work.
Risks Involved
Top three customers account for 26%, 20%, and 14% of revenue
Transportation Security Administration, U.S. Department of Homeland Security and The U.S. Department of Defense
Our contracts with the U.S. Government, and many contracts with other entities, permit the government client to modify, curtailor terminate the contract at any time for the convenience of the government, or for default by the contractor.
Conclusion
WYY is a young company with a bright future ahead. They are continuing to grow their market share with the federal, state and local governments and expect double digit growth in the near future
WYY is also focusing on growth in its commercial markets with its consulting business
The reward outweighs the risk involved with a small cap stock
Company is beginning to be profitable and has low debt levels