Stonegate Capital Partners Initiates Coverage on Siyata Mobile Inc. (TSXV:SIM)
DALLAS, TX / ACCESSWIRE / November 8, 2019 / Siyata Mobile (TSXV:SIM)
The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/SIM%20Initiation_11.7.2019.pdf
Siyata Mobile, Inc. develops and provides cellular communications solutions for enterprise customers. Siyata is a leading global developer of vehicle mounted, cellular based communications platforms over advanced 4G mobile networks under the Uniden Cellular and Siyata brands. The company's commercial vehicle devices are specifically designed for professional vehicles such as trucks, vans, buses, emergency service vehicles, and government and commercial fleets. Siyata's innovative platform is designed to facilitate the replacement of current in-vehicle, multi-device status quo with a single device that incorporates voice, Push-to-talk over cellular (PoC), and data fleet management solutions. The company is targeting rapid growth by capitalizing on the proliferation of cellular technology in non-traditional market segments.
- Large and growing market opportunity - Push to talk (PTT) communication solutions have become a ubiquitous solution for mission critical mobile workers. Primary users of PTT include trucking and logistics, transportation, manufacturing, construction, and public safety markets. Siyata believes the enterprise vehicle market represents over 17.1M commercial trucks in the U.S. with over 2.3M in Canada. Additionally, the first responder market in the U.S. is estimated at over 3.5M emergency vehicles. In addition, VDC Research expects the US population of PoC users to grow at a 13.6% CAGR from 2018 to 2023.
- Technology upgrades are acting as a catalyst - PTT communications have primarily resided on private Land Mobile Radio (LMR) networks (think CB radio). LMR has remained the primary network for PTT communications given LMR's robustness, reliability and reach. However, this is changing. With the emergence of LTE, wireless networks can handle larger throughput while also providing high quality voice. This dynamic has driven wireless operators to start targeting PoC solutions. As LMR systems continue to face costly hardware and infrastructure maintenance expenses, more and more organization are turning to PoC solutions.
- Siyata is at the beginning of its growth - Siyata's UV350 is the world's first and only dedicated in-vehicle smartphone with 4G/LTE capabilities. What's more, it is specifically designed to optimize mobile communications with driving. Recently, the UV350 has received device approval from the Government's first responders' network, FirstNet, AT&T in the US, Bell Mobility, and Rogers Communications in Canada. As a result, Siyata is expecting strong sales and margin growth in the 2H of 2019 and beyond through its global carrier launches.
- Siyata's offering has first mover advantage - Siyata has worked with multiple carriers over an extended period in order to obtain intelligence on what features to offer, and device performance capabilities necessary to act as an approved vendor. In fact, Siyata worked with AT&T over an 18-month period and underwent stringent device testing for its UV350. As such, Siyata has first-mover advantage vs. other potential competitors.
- Operating leverage should lead to expanding margins - Given the large market opportunity, Siyata is projecting high growth and expanding margins. For F18, Siyata reported revenue and adjusted EBITDA of CAD$14.2M and CAD$(6.3M), respectively. For F22, Siyata is targeting revenue growth to $100M and EBITDA of $30M, respectively.
- Valuation - Based on our DCF of SIM, we arrive at a valuation range of ~CAD $0.70 to $1.43, with a midpoint of $0.97; Additionally, we use an EBITDA multiple analysis of the Company's stated goal of $30M in EBITDA by FY 2022 to reach a price of $0.77; see page 8 for further details.
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
SOURCE: Stonegate Capital Partners
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