Q: Hello 5i Research team,
I am always suspicious when a company does not provide or comment its quarterly results in its press release. As I do not think there is some seasonality, I am comparing q4-17 vs q3-17 : quarterly revenue growth dropping from 58% to 27%; gross margin dropping from 54% to 36%; sales and marketing as a % of revenue increase from 14% to 22%; administration as a % of revenue increase from 19% to 30%; operating cash flow before changes in working capital was negative 0,2 M$ vs positive 1,5 M$ for the first 9-months.
Echelon forecasted 2,8 M$ in revenue, 0,6 M$ in EBITDA (very large miss). Could you comment on my analysis? Could you comment on management and board members quality and credibility? Is it a classic case of a growing company having some growing (pains) expenses before some more revenue growth or is this the first signs a management team that is bad at manage expenses? With a year-end of September, the stock has been under presssure since mid-October, it looks like some knew about weaker results, and traded. Would you agree that trading looks suspicious since mid-October? Is PTE still worthy of being included in your growth portfolio or the small cap basket allocation of your clients? Immediate sell order or they invested for future growth?
Thank you for your collaboration, Eric
I am always suspicious when a company does not provide or comment its quarterly results in its press release. As I do not think there is some seasonality, I am comparing q4-17 vs q3-17 : quarterly revenue growth dropping from 58% to 27%; gross margin dropping from 54% to 36%; sales and marketing as a % of revenue increase from 14% to 22%; administration as a % of revenue increase from 19% to 30%; operating cash flow before changes in working capital was negative 0,2 M$ vs positive 1,5 M$ for the first 9-months.
Echelon forecasted 2,8 M$ in revenue, 0,6 M$ in EBITDA (very large miss). Could you comment on my analysis? Could you comment on management and board members quality and credibility? Is it a classic case of a growing company having some growing (pains) expenses before some more revenue growth or is this the first signs a management team that is bad at manage expenses? With a year-end of September, the stock has been under presssure since mid-October, it looks like some knew about weaker results, and traded. Would you agree that trading looks suspicious since mid-October? Is PTE still worthy of being included in your growth portfolio or the small cap basket allocation of your clients? Immediate sell order or they invested for future growth?
Thank you for your collaboration, Eric
