Datametrex Stock: 1 Great Play Combining 2 Sectors
Datametrex stock, or from its real name Datametrex AI Limited (DM.V), is a company involved in not 1 but 2 different sectors: Cyber + Health Security. After seeing a 52-weeks-high ( CAD$0.37 at the beginning of the year), the stock underwent a slow and steady downtrend to finally reach a current share price of CAD$0.18 for a CAD$63M market cap. But this downtrend combined with a low share price doesn’t mean the company isn’t doing well in the backstage.
A Big Sector Growth Opportunity
Datametrex is involved in Cybersecurity and Healthcare Security. It enables the Company to reach more targets and to expand faster than if they were just in one sector. Moreover, these sectors are currently in the headlines as we talk about fake news, disinformation… and the current pandemic which is Covid. These sectors are the future and will slowly but steadily grow.
Indeed, the cybersecurity sector is expected to grow to reach USD$248B by 2023 when it was only at USD$137B in 2017. In 6 years, it represents a 81% growth. More than ever, the internet access is easy to reach, and it is easy to write or to read fake information. This problem has been brought to light with Covid where worldwide governments currently try to fight this problem.
Regarding Covid-19, the global market for COVID-19 diagnostic services was valued at $60.3 billion in 2020. The market should grow from $84.4 billion in 2021 to $195.1 billion by 2027, at a compound annual growth rate (CAGR) of 15.0% during 2021-2027. As we realize more and more we will have to deal with Covid more than we expected, it should be a great opportunity for Datametrex to get more and more contracts on this side too.i
Nexasecurity / Covid Testing
Their front weapon Nexasecurity, is ” an open source intelligence threat assessment and protection platform. Built in conjunction with the Canadian Government and Defense Research, it combines years of battle tested, military grade social media intel technology with the latest AI to expose both real and cybersecurity threats before they manifest.”
This software is very easy to use. With a subscription, all you need is a Google Chrome browser, and then you have access to Twitter, Tumblr, Blogs, Forums, RSS, Online News, and Videos. With the W5 Entity Extraction, the user knows who’s doing what. Their AI extracts ‘Whom said What, to Whom, on What channel, with What effect?’ The with their automated summarization, they increase the user’s situational awareness. Their AI reads the big data and then summarizes it, allowing the user to make sense of the noise faster.
They also produce and sell Covid testings. As Covid testings are used everywhere ( sport tournaments, Air Traveller, School, Film & TV, Remote working locations…), Datametrax can provide a lot of places. Their tests kits are FDA-EUA approved, and ISO 13485 : 2016, ISO 14971 : 2012 normalized.
Their technology find new clients. Datametrex signed important contracts in the last month:
- September 22nd: the Company announced that it received Purchase Orders for approximately CAD $900,000 from its clients in South Korea. South Korea is an important sector for Datametrex because the country wants to be in the top 5 AI contenders. We could see more contracts coming from there;
- September 14th : Datametrex signed a COVID-19 service agreement with a major media and entertainment company, and has exceeded the Company’s revenue guidance. The aggregate dollar amount of revenue is expected to be around $20M for the initial nine months;
- August 30th: A news release announced that Datametrex has signed two new service agreements for COVID-19 testing in Montreal with two Hollywood feature-length films.
If we take a look at the Price/Sales ratio and compare it to competitors, Datametrex’s is very small. They have a P/S ratio of 1.22 when competitors such as Empower clinics has a P/S of 24 and Therma bright has a P/S of 22,518 ( a high number because of a FDA approval pending).
For the last earnings report, the Company had CAD$10,555,375 in cash for CAD$38,196,360 in total assets for CAD$7,083,159 liabilities. If we divide it into the two segments they are involved in, it represents this:
- AI and Technology: CAD$20,676,473 in assets, CAD$1,514,984 in liabilities;
- COVID-19 Test kits: CAD$17,519,887 in assets, CAD$5,568,175 in liabilities.
Datametrex currently has 355,166,034 outstanding shares. Since the beginning of the year, the Company has issued almost 87M shares, augmenting the total number of shares.
On June 18, 2021, the Company issued 60,000,000 share purchase warrants with an exercise price of $0.26 expiring in 24 months in connection with the acquisition of Medi-Call Inc. The Company also has 11,600,000 options with a weighted average exercise price of CAD$0.17
These numbers could frighten investors as a dilution would mean a reduction of their stakeholder value.
On the bottom line, Datametrex has the right products with Nexasecurity and their tests kits. They also anticipate generating revenues up to $50M for the full fiscal year ending December 31, 2021. The stock is still very undervalued and should go up in the future. Besides, the high number of warrants and options could cool investors off as the number of outstanding shares is pretty high and the %held by insiders is small (3%).
It will be interesting to see how the Share Price will fluctuate in the future and this is why you should at least Datametrex stock to your portfolio.
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This article solely expresses the opinion of the writer which might be disagreeing with the other writers of Money,eh?
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