Globalstar update- (NYSE: GSAT) is up 45% since our initial report on December 20th, 2016 which can be viewed at the following link- http://tradersnewssource.com/wp-content/uploads/2016/12/GSAT-Analyst-Quint-12-20-16.pdf
Globalstar, Inc. (NYSE: GSAT), provides mobile satellite services (MSS), including voice and data communications services globally through satellite. The company’s share price touched $1.96 and has been trading at almost 10 month highs after surging more than 100% since our initial coverage in December 2016. But its valuation still lags that of its peers. It could catch up, though, if the company ends up being bought out as the communications market consolidates.
In fact, its peer Straightpath (STRP) has already been giving high-end returns, with the news of being bought out by AT&T in a $1.6 billion deal. Since ultra-high band spectrum is a critical part of both AT&T and Verizon’s 5G plans, Globstar could also close their valuation gap.
The company recently announced that it would exhibit its innovative sensing and tracking technology at ENTELEC 2017 in Houston, TX, April 25-27. Globalstar, in partnership with Proactive Sensing has come up with a revolutionary new industrial-grade system capable of monitoring both fixed and mobile. Globalstar provides the level of components and services necessary for Proactive Sensing to design a cutting-edge, high-tech solution.
Prior to this, Globalstar also announced, that it would launch a new compression service for the satellite industry—this effort will include rolling out compression services developed by Yippy, Inc. (YIPI) to Globalstar’s subscribers as well as providing this technology to other MSS providers and FSS operators.
The CEO of Globalstar, indicated that the rollout of this effort has been a major initiative for the company’s satellite operations teams and last year the firm provided the service on a trial basis. After months of rigorous testing, the conclusion is that Yippy’s platform provides subscribers with a greatly enhanced data service experience.
The company had reported its fourth quarter earnings result on February 23rd, where the company’s revenue for the fourth quarter of 2016 increased by $1.6 million, or 7%, from the fourth quarter of 2015. This increase was driven primarily by higher service revenue reflecting increased ARPU across all types of services. Net loss was $117.2 million for the fourth quarter of 2016 compared to net loss of $26.8 million for the fourth quarter of 2015. This increase resulted primarily from higher non-cash derivative losses of $90.1 million.
Over the past two decades, the global Mobile Satellite Services market has experienced significant growth. Growth in mobile satellite data services is driven by the rollout of new applications requiring higher bandwidth, as well as low cost data collection and asset tracking devices, and technological improvements permitting integration of mobile satellite services over smartphones and other Wi-Fi enabled devices.
While the stock has run up in the recent past from $0.80 levels in December 2016 (i.e. from our initial coverage) to currently at around $2, valuations are still reasonable considering the possibility of GSAT being acquired and also the fact that satellite space as an investment theme has gathered substantial pace.
Description: Globalstar is a leading provider of mobile satellite voice and data services. Representatives of industries such as government, emergency management, marine, logging, oil and gas and outdoor recreation are among Globalstar’s customer.
Major product applications: Globalstar data solutions are ideal for various asset and personal tracking, data monitoring, SCADA and IoT applications. The Company’s products include mobile and fixed satellite telephones, the innovative Sat-Fi satellite hotspot, Simplex and Duplex satellite data modems, tracking devices and flexible service packages.
GSAT operates a series of satellites that cover 80% of the Earth’s surface. It had upgraded its network to second generation technology with the launching of 10 satellites over 2010 and 2011. Having deployed this network, GSAT is attempting to build out coverage of its broadband services both in the United States and abroad.
Major Technology: GSAT’s prominent technology is called Terrestrial Low Power Service (“TLPS”), which is the main driver of the stock in the recent past. TLPS purports to multiply current capacity in areas presuming it receives regulatory approval from the Federal Communication Commission (“FCC”). TLPS relies on transmission from GSAT’s low altitude satellites. The technology promises to allow smart devices to access meaningful speed outside of areas covered by traditional wireless.
Key updates on 2016 performance:
During 2016, Globalstar reached one of the most significant milestones in its history when the FCC adopted a Report and Order that will enable it to provide terrestrial authority over its 11.5 MHz of licensed 2.4 GHz spectrums. The company is now aggressively pursuing similar terrestrial authority in numerous international jurisdictions.
2016 was also a pivotal year for the company’s core MSS business, as it completed the multi-year process of upgrading gateways with second-generation infrastructure together with its partners at Hughes and Ericsson. With these enhancements, the company will be able to support products with faster data speeds, improved performance and expanded applications.
Key Stock Influences
Some key influences that might govern future stock price performance include:
- Will FCC approve TSLP? If approved, how will GSAT monetize the opportunity?
- International expansion and ways to monetize?
- Progress on growing EBITDA, improving liquidity and satisfying loan covenants.
- Progress on technology upgrades to second-generation technology – execution and potential decline in capex and costs over next couple of years.
- The global communications industry is highly competitive. Globalstar currently faces substantial competition from other service providers that offer a range of mobile and fixed communications options. Its most direct competition comes from other global MSS providers. In this competitive landscape, the company’s ability to sustain revenue growth while improving profitability would remain a challenge.
- Another key risk is related to government regulations; GSAT’s business is subject to extensive government regulation, which mandates how it operates, increases the cost of providing services, slows expansion into new markets and subjects its services to additional competitive pressures. Any adverse regulatory development could potentially lower tariffs and hence returns.
Total revenue for the fourth quarter of 2016 increased by $1.6 million, or 7%, from the fourth quarter of 2015. This increase was driven primarily by higher service revenue reflecting increased ARPU across all types of services. This increase in service revenue was offset partially by a decrease in revenue generated from subscriber equipment sales due primarily to the Company selling fewer Simplex units during the three months ended December 31, 2016.
During 2016, total revenue increased by $ 6.4 million to $ 96.9 million from $ 90.5 million in 2015. This increase was due primarily to a $9.0 million increase in service revenue, which is attributable to growth in average subscriber base and increases in ARPU. This increase in service revenue was offset partially by a $2.6 million decline in revenue generated from subscriber equipment sales, which resulted primarily from a lower volume of Simplex and Duplex units sold during 2016.
Loss from operations increased $0.9 million, or 6%, to $16.8 million in the fourth quarter of 2016 compared to $15.9 million in the fourth quarter of 2015. This increase was due to a $2.5 million increase in operating expenses driven primarily by higher non-cash compensation of $1.0 million, offset partially by a $1.6 million increase in total revenue for reasons previously discussed.
Adjusted EBITDA for the quarters ended December 31, 2016 and 2015 was $5.1 million and $4.6 million, respectively. This 11% increase in Adjusted EBITDA was due to a $1.6 million increase in revenue offset partially by a $1.1 million increase in expenses (excluding EBITDA adjustments).
Net loss was $117.2 million for the fourth quarter of 2016 compared to net loss of $26.8 million for the fourth quarter of 2015. This increase resulted primarily from higher non-cash derivative losses of $90.1 million.
Net loss was $132.6 million for 2016 compared to net income of $72.3 million for 2015 due primarily to the fluctuation in derivative liabilities during the respective periods. The Company recorded a derivative gain of $181.9 million in 2015 compared to a derivative loss of $41.5 million in 2016.
Cash Flow & Balance Sheet
As of December 31, 2016, Gobalstar held cash and cash equivalents of $ 10.2 million. It also had $38.0 million in restricted cash.
The company’s current sources of liquidity include cash on hand and future cash flows from operations. Globalstar has various contractual commitments related primarily to debt service obligations and capital expenditure plans and the company’s current sources of liquidity could be insufficient to meet obligations over the term of these agreements. Also, restrictions in its Facility Agreement limit the types of financings it may undertake. The company’s ability to manage its overall liquidity and financial flexibility could continue to remain a critical credit sensitivity factor over the near to medium term.
Moreover, the future issuance of additional shares of common stock could cause dilution of ownership interests and adversely affect stock price.
On Wednesday, April 26th 2017, GSAT shares declined by -3.92% to $1.96 on an average volume of 5.77 Million shares exchanging hands. Market capitalization is $2.10 billion. The current RSI is 66.20
In the past 52 weeks, shares of GSAT have traded as low as $0.63 and as high as $3.0
At $1.96, shares of GSAT are trading above their 50-day moving average (MA) at $1.58 and above their 200-day MA at $1.31
The present support and resistance levels for the stock are at $1.94 and $2.10 respectively.
About Traders News Source:
Traders News Source recent profiles and track record, 534% in verifiable potential gains for our members on 3 small cap alerts alone!
January 31st, 2017 (NASDAQ: HIMX) opened at $5.10/share and hit a high of $9.68/share March 24th, 2017 for gains of 89% within 60 days- http://finance.yahoo.com/news/himax-technologies-review-4q-2016-130000319.html
February 6th, 2017- (NASDAQ: SCON) opened at $1.12/share hit a high of $1.80/share within 10 days our member potential gains- 60% – http://finance.yahoo.com/news/superconductor-technologies-potential-revolutionize-smart-130000844.html
March 6th, 2017 (OTC: USRM) opened at .035/share and hit over .17/share within 25 days for gains of 385% for our members- http://finance.yahoo.com/news/traders-news-issues-comprehensive-report-130000743.html
These are numbers that make traders drool. Any trader in any market would fall all over themselves to see numbers like this. So, if you’ve been on the fence, perhaps it’s time to start doing some research and verify our numbers for yourself. We are constantly raising the bar and separate ourselves from the rest of the small-cap newsletters as the best in business.
We know with a large following comes a large responsibility as we have everyone from institutional investors to the beginner following our profiled securities in our newsletters. This is something we take very seriously always seeking small cap growth companies that have both near and long-term potential for our members.
Limited Time Offer VIP Mobile Alerts
***Get our small cap profiles, special situation and watch alerts in real time. We are now offering our VIP – SMS/text alert service for free, simply text the word “Traders” to the phone number “25827” from your cell phone***
Traders News Source Mission Statement
We strive to highlight the future potential as well as the inherent risk in each small cap company we cover while remaining neutral as a leading third-party equity research firm.
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Vikas Agrawal, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.