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Nete…Am I bullish ENOUGH?

As i sit here thinking about my blog posts in the articles below and comments made on Stock Twits I can’t help but to wonder whether for all my Bullishness….whether I am bullish ENOUGH even?

I’m beginning to wonder.

Let me explain this in detail to you. In 2016 the Company did 54M in revenues. It was a very good year coming in at 35% growth from the year before.  AND…they did that despite the issues with their mobile division. As i discussed below in an article that issue played an ENORMOUS part in distorting the real growth that occurred mainly towards the end of the year. Were it not for that issue as i discussed below Q4 would have come in at an AMAZING 20M revenues vs the 15.3M it did. In other words…the quarter REALLY was everything I thought it could be in terms of transaction dollars and how they increased throughout the year going from about 405M in Q1 to something really that can only be described as Hypersonic in Q4…at about 1.1 Billion i estimate.

Again…….read those numbers. Q1. 405M  Q4…1.1 Billion. For a company THIS size? To see THAT in the space of 3 quarters ? To quote an old songs lyrics..there’s something happening here that isnt exactly clear.  What is clear though is business entered a Warp drive….Exponential rate of increase.  And again..understand this against the backdrop of this being such a small company. To see that is something really beyond the norm.

In any event…in an article below i outline what might be expected for Q1.  15M vs 11.2M would put Q1 at about the same 35% growth rate they saw last year. It ALSO passes the test I put it through when looking at how Q4 2015 moved into Q1 2016’s results.  In order to keep pace with 35% growth 2017’s numbers i guesstimate would look something like this.

15M………17M…..19M…..21M for Q1 -Q4.  That would equal  72M.

72M…..vs 54M for 2016 would equal a full year 35% growth rate.  Sounds reasonable….right?

Well…maybe….Not.

Let’s look at a few things..shall we?

Review the chart in this post….   https://stocktwits.com/message/79856675

It would appear that based on that chart….the company themselves …who has been VERY accurate with their predictions as detailed on that chart…seems to be predicting MORE than that 72M.  And, more like 77-78M it would seem.

And now..let  us consider this.

LAST year…trans $ in Q1 was 405M.  Q4 was about 1.1B.

REVENUES…in Q1….were about 11.2M.  In Q4…if you FACTOR OUT the mobile issue which REALLY distored the numbers….the growth in revenues from Q1 to Q4 would have been about…….80%.  Transaction $….about 150% growth from Q1 to 4.

Let’s just take 15M then for Q1 2017…..and factor in 80% growth by Q4.

Instead of the 21M……..we’d be at 27M by Q4 this year.

interesting then that THIS would seem to be more inline with the companies chart AND inline with they Hyper growth seen last year in trans. $ and what would have been revenues.

And so…I’m starting to wonder whether 2017 might look more like this…

15M……17M…….20M…..25M.  = 77M

If so, that would put full year growth at 42.6% vs last years 35%.

Mind you…this is more bullish than even I thought but…..its what the chart predicts above. And….its supported by how last year grew.

I think what we need to realize is that this industry is growing and evolving VERY rapidly now. Think of yourself. How do you use your smartphones now? How do you pay bills? It’s just growing all the time. All the different ways that technology is evolving. But still..as i look around i see a LOT of companies that still arent on board yet.

But they’re coming. Soon. And its going to be a mad rush.

Remember what the company has predicted. Global growth from 35B….to 800 Billion.  By 2019 or 2020 even.

Do you see folks? Whats happening here?

WARP DRIVE. EXPONENTIAL GROWTH in the industry.

And…amazingly…our little investment here in NETE just might find themselves an industry leader.

 

~Congo

jmho

do your DD

I’m currently long Nete Stock

 
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Posted by on April 11, 2017 in Uncategorized

 

Nete….Q1 2017…Big Surprise in store?

Now that we have Q4 out of the way and have seen how much mobile was really impacting and overshadowing the REAL growth story behind this company I thought I’d take a close look at Q1 and, what we might expect.

First, for a little background information, Q1 last year was reported on May 16th and so I’m expecting around that time again for this year. In other words..it’s coming up QUICK. There’s not too much of a time gap between the annual report and Q1 results. Last year Q1 came in at 11.26M in revenues. I thought i’d take a very close look at that and see if it might be a predictor of what to expect in a few weeks.

In order to do that, i went back to Q4 2015 and looked at the breakout of those numbers which i had to extract from the annual report as the company didn’t break out Q4 separately.  This is what they show.

Q4…..2015

North America  8,112,713

Mobile  5,554,155

Online  1,446,244

Total Q4 revenues = 15.1M

I then looked at Q1 2016 breakout

North America  7,852,648

Mobile 1,993,504

Online 1,414,907

Total Q1 2016 revenues = 11,261,059

Do you see what changed? Not much…except the mobile issue.  And this is the issue that continue throughout the year up to Q4 where it impacted a LOT our total revenues year over year. Making the comparison 15.3M vs 15.1M. And so, Q4 2016 Mobile revenues DECLINED to just 933,829 vs the 5.55M figure in Q4 2015. That is what distorted the REAL picture of enormous growth in our other businesses. And again..without that …Q4 would have been 20M….not 15.3M.  Because that 4.7M difference was ALL in the mobile category.

And so….to try to predict Q1 2017 what i did was to look at Q4 2016 breakdown. Here it is.

North America   12,688,033

Mobile  933,829

Online  1,701,438

Total Q4 2016 revenues = 15.32 M

If you look at LAST year then….. Q1 wouldn’t have been any different to speak of in the

North America category or the Online category. Perhaps it was some seasonal business coming off and new business coming on or, whatever made that up…that’s how it worked out last year.

And so….to try to predict Q1 this year….lets take that

North America  12.68M

Online  1.7M

And for Mobile JUST add in the

Mobile 988k

I did that because we are still going to be fighting the mobile issue by about 1M vs last year.

I am going to predict that Q1…..2017….will come in in the area of 15M +.

Making the COMPARISON to last year to be…

15M vs 11.2M 

35%….year over year growth is continuing.

 

We’ll see how this works out.  🙂

 

~Congo

jmho

all work is estimates and can change

Do your DD

Currently long NETE stock

 

 
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Posted by on April 7, 2017 in Uncategorized

 

NETE….The GROWTH is still there

When nete reported Q4 revenue #’s of 15.3M many of us stared in wonder and disbelief at how that had happened.  Followers like @Niery cancelled his restaurant prime rib order, stormed out and went home and ate peanut butter and jelly instead….. @AgBanker put his new lexus order on hold and decided his 15 yr old car was good enough for now….and i crawled under the sheets on the bed at the hotel i was staying at and wondered….how AM i going to pay this room service tab?  It was a SURPRISE.  How could transaction $ from Q1 405M go to NOT EVEN the 733M I and others had calculated…but something more along the lines of probably 1.1 Billion instead? And have that equal 15.3M vs 15.1M in Q4 2015. It just REALLY looked like the growth wasnt there. Or, as someone put it to me….are they giving this sh** away or what !! ?  We then searched for an answer and thought we found it in the “try it before you buy it” promos. 90 days…maybe it pushed all the business forward by that amount. Sounded fair and reasonable but that wasnt it. What i am going to do here for you is share what i did last night. I broke out Q4 revenues in EACH category and then compared them to Q4 2015 the same way. I WISH the company had done this but they never break out Q4 separate from the annual results. Probably to try to save on Accounting fees which are already pushing 400M per year. And so…here you go.

Category………………2015………………2016

No. America     8,112,713             12,688,033                 56% y/y growth

Online             1,446,244                 1,701,438                17.64% y/y growth

Mobile               5,554,155                933,829                   4.7 MILLION Dollars LESS

Totals                 15.1M                        15.3M

The Transaction $ increase was TOTALLY there……….AND….the revenue increase was as well. In the No. American + online segments.  It was all just wiped out with the exception of 200,000 by the changes the company made THEMSELVES to mobile while they are re-working how that business will operate and where going forward.

While revenues WERE 15.3M, in order to fairly present this one would need to either add that 4.7M to 2016……making it 20M or….deduct it from 2015 in order to see the real underlying growth here that their existing businesses is generating.

What is happening with mobile was explained in detail in the conf. call.

The company has explained this in their reports and press releases but i think given the magnitude of this the BEST way people could have seen it would have been if they broke out Q4 vs Q4……like i just did above. It really shows it and shows the key ingredient of the huge growth that is occurring in their existing businesses while this mobile issue is addressed.

~Congo

jmho

do your DD….I’m currently long NETE stock

 

 
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Posted by on April 6, 2017 in Uncategorized

 

Nete Q4…..Suddenly became Much bigger

Did you ever do something in your life that you were SO Sure of, only to have it thrown back in your face that it was SO wrong, only to find out……you were right all along?

Well, for the most part anyway. Except for the part i missed that impacted it. In a big way.

Welcome to Nete’s Q4.

Leading up to Nete’s Q4, i wrote a few blog posts here analyzing transaction dollars quarter to quarter and how they suggested that we were in for a BIG Q4 number. My work suggested the number would be 19M, 20M…maybe even 21M.  I set my expectation lower than that, at 17M because it was a number i could be very happy with anyway but as i expressed on several occassions, I REALLY thought it was going to be 19-20M.

Imagine then…my horror….my outright shame even….when the number came in at 15.3M.  versus 15.1M in Q4 2015.  A whole year….all the hype surrounding how great growth was …and it was reduced to that. I and others scrambled to find the reason. Frankly, i couldnt believe it. Where did 1.1 Billion in transaction dollars go? Because that is the amount that was suggested that Q4 came in at when the final tally came out at 2.45B. But revenues were….15.3M ? We found, a solution. It was in the promos we thought. The way the company was promoting a 30-90 day trial for new customers to test drive the services. Surely, that was it ….right?  Wrong.  Or, maybe it still is some positive impact yet to come. But that is not what caused the distortion in what we were seeing.

It was due instead to the mobile solutions segment. When you factor in THAT issue….an apples to apples comparison would be Q4….2016…..came in at 20M revenues vs 15.1M in 2015.  Right on target. While revenues really were 15.3M….if we’re going to look at a year over year comparison we really need to add back in an adjustment for this issue of 4.7M. It’s really most important to do that because it REALLY shows how much this companies business is growing in the businesses they’re in now. ALSO..if you adjust for it, it would be as if the entire year didn’t grow at 35%…..it was more like 45% instead.

I’m not going to again break out all the transaction #’s and whatnot, but i will just refer you to the conference call and particularly the segment where Lisa From Zacks had the discussion with the company about this. you can see in that discussion how much this mobile segments issue impacted the quarter versus quarter year over year results.

It was enormous. And again..while the actual number WAS 15.3M….and i dont want to try to distort that fact….the IMPACT of this in how we should view their business was more like it was 20M instead. Versus 15.1M last yr.

Huge?

I think so.

 

~Congo

jmho

Do your DD.

I’m currently long Nete Stock

Link to conf. call transcript…thank you to Lisa From Zacks for really pursuing this questioning with the company. 🙂

https://finance.yahoo.com/news/edited-transcript-nete-earnings-conference-233118552.html

 
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Posted by on April 5, 2017 in Uncategorized