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IQSTEL Inc. Share Price Surges; Analyst Coverage, Record Revenues, And Seven Subsidiaries Attract Attention

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IQSTEL Inc. Share Price Surges; Analyst Coverage, Record Revenues, And Seven Subsidiaries Attract Attention

February 16
07:42 2021

IQSTEL Inc. (OTC: IQST) stock is having a tremendous start to 2021. Since January, shares have surged by more than 290%. And the move is happening with consistent volume and follow-through. In February, the stock is trading higher by triple-digit-percentages with momentum decidedly bullish. And to add more of a tailwind, recent news is likely to accelerate the already impressive jump in price. 

In fact, several important updates are attracting investor’s attention. The most recent came last Thursday when IQST announced exploring a business opportunity with a Fortune 500 client. The due diligence taking place on both sides is evaluating the benefits of a potential business engagement with iQSTEL’s Technology Division subsidiary, IoT Labs. According to IQST, the deal may involve IoT Labs’ landmark Smart Gas technology, a device that won the Smart Appliance of the Year award from IoT Break Through. More specifically, both companies are exploring a joint effort to develop a two-way communication device of the Internet of Things (IoT) for the chemical industry (IoT Smart Tank), to include a back and front-end platform to run as a Mobile App.

Once consummated, the deal could deliver tremendous product validation and a sustainable and potentially lucrative monthly recurring revenue stream. Looking to take a running start, the agreement’s parameters are structured around an initial rollout of IoT Smart Tank solutions to be deployed on 2500 devices. An update on the progress of this deal could boost the company’s value significantly. Keep this deal on the radar.

And while a deal with a Fortune 500 company could cap off an already strong February, IQST is executing exceptionally well through its other operating subsidiaries.

Analyst Coverage, Record Revenues, And Strong Guidance

Investors often take notice when a conservative company like IQST puts out favorable revenue guidance. In January, IQST management raised guidance for the full-year 2021 to $60 million, reflecting a 34% gain over the past year. But, that guidance was made before its announced talks with its potential Fortune 500 client. Adding that deal into the equation and revenues could exceed their earlier guidance. Moreover, it could expose that the current $71 million market-cap substantially undervalues its rate of growth. A research report by Goldman Small Cap Research underscores that point.

In fact, Goldman’s research suggests that despite the triple-digit-percentage surge in share price, the stock has enormous room to continue higher. And his analytical models support that from an enterprise value alone, the shares could justify a doubling in price double based on current industry and peer multiples. The stock’s 290% increase since January indicates that investors are catching on to that possibility. And, there is no expectation for a slowdown, especially with IQST focused on enormous sectors that can target both emerging and maturing companies. 

Thus, January and February may be the precursor of better things to come as 2021 unfolds.

Milestones An Subsidiaries

Several important events are fueling the drive. Investors were first impressed by a strong message from the CEO that laid out his company’s course for the next quarter and year. That presentation was followed up by an update to Goldman SCR’s initial report, where he reiterated a compelling case for why iQSTEL’s stock is significantly undervalued. He was right. Shortly after the update, shares surged high and handily topped the revised six-month price target of $0.61, which at the time represented a more than 89% increase from its current levels. Instead of stopping at $0.61, the shares climbed up to $0.99 before pulling back to consolidate in the .80 cent range. The stock is set to close Fridat at roughly $0.80 per share on more than two-million shares traded.

An article published by Greenlight Stocks added to the optimistic mood. That coverage provided detail of iQSTEL’s seven operating subsidiaries that have extended reach into thirteen countries. Moreover, that piece, and Goldman’s research, offered some detailed insight into the value opportunity presented in each of IQST’s targeted markets. That value made its own headlines, with IQST posting record-setting revenue performance in Q4, highlighted by reaching $5 million or higher in sales for three consecutive months. Not only was that a first, but it also led IQST management to raise its projected year-end revenue target to $44 million, which would represent a 148% increase over 2019. 

The growth is by design. 

Record Revenues, Subsidiaries, And Global Presence

iQSTEL is clearly proving that its growth is planned and intentional. As noted, IQST posted consecutive record-setting revenues to finish out the last three months in 2020. More importantly, these revenues were substantial, with each month generating $5 million or more in income. That strong finish capped off an already good year and pushed revenues higher by 168% compared to its fourth-quarter last year. For the year, annual revenues surged 148% compared to 2019 totals. Those results and the momentum carried from Q4 led management to raise 2021 guidance. 

Remember the $44 million in revenue guidance? Well, it went higher after management evaluated its market position. The company is now expecting to reach over $60 million in 2021 revenues, with support from seven subsidiary companies contributing to the revenue mix. Global partnerships will also add to sales by targeting diverse opportunities across multiple communication platforms in the SMS, VoIP, and IoT sectors. Further, by capitalizing on numerous revenue sources from more than thirteen different countries, iQSTEL appears to be in its best position ever to maximize its influence and standing in the cloud-based services space. 

Moreover, from a competitive perspective, iQSTEL is already challenging some of the largest wholesale network carriers by targeting significant opportunities with products and services that can capitalize on niche and unmet demand. In fact, competitors are learning a valuable lesson- IQST is no longer just the Voice over Internet Protocol services company started more than a decade ago. 

Instead, they are getting recognized as a respected and diversified player in a very technology-driven market.

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From VoIP To SMS, Fintech, and Electric Vehicles

Things have moved quickly for IQST. A decade ago, they were pretty much a straight-up VoIP company. However, by integrating new technology and keeping pace with industry changes, IQST successfully positioned itself to meet the surging demand for SMS and Fintech services, two sectors that have experienced explosive growth during the past decade. That growth served two purposes for IQST. First, it opened the door to multiple M&A opportunities, which they took advantage of. Second, the demand surge helped facilitate numerous partnerships and agreements in the SMS and Fintech services space. Thus, growth at the company has exceeded even their own guidance.

But what capped it all is that iQSTEL was smart enough to build an infrastructure to manage its growing global reach and provide its subsidiaries an efficient and seamless opportunity to contribute to a common corporate strategy. And to get to $60 million, that was an important step to complete.

Moreover, because of the steps they took, IQST can maximize its opportunities with PayVMS, QGlobal SMS, and itsBchain LLC. These three subsidiaries are targeting high-dollar markets with 21st-century technology products and services. Payment Virtual Mobile Solutions (PayVMS) establishes a Visa Prepaid Debit Card Service for customers to use both in-person and online. From ATM transactions to mobile payments, the platform provides specialized services, primarily targeting the immigrant population, to fill an unmet need in a substantial market. The strategy is targeting a market where these services are not usually provided.

QGlobal SMS, among other SMS services owned by iQSTEL, offers international facilitation of SMS conversions, allowing users to transact business and communicate effectively across continents. To enhance and ensure security and efficiency in those services, iQSTEL will leverage its 75% stake in itsBchain LLC, which is developing a comprehensive blockchain solution to prevent fraudulent transactions. ItsBchain will also offer services that safely facilitate payments between VoIP and SMS. Each market provides substantial revenue-generating opportunities.

The quick takeaway is that each of iQSTEL’s subsidiaries and business interests adds substantial intrinsic value. And with seven of them operating globally, combined with its branded platforms that target billion-dollar market opportunities, IQST’s 2021 revenue target sounds conservative. Factoring in additional assets puts an exclamation point on that proposal.

Partnerships, Strategy, And Intentional Growth

The three IQST assets above are only a part of the valuation equation. There’s much more to consider. Additional IQST partnerships and subsidiaries offer necessary SMS conversion and IP-PBX services. 

The company is also extending its brand reach into prepaid debit cards, specialized SMS coverage, IoT (Internet of Things) products designed for household utilities, and the electric vehicle market. They recently entered into an agreement with Alternet Systems to leverage their expertise to earn a piece of the billion-dollar electric vehicle sector. The good news is that despite IQST having its hands in many different industries, its infrastructure and depth of management allow for a transactional connection that contributes to a common objective.

And while revenue growth often earns the most attention, IQST management should be applauded for substantially improving its capital structure. Complementing its triple-digit revenue growth, iQSTEL recently enhanced its balance sheet by reducing outstanding debt by 48%. They also exchanged derivative liabilities for commercial promissory notes and eliminated convertible debt. These moves support the company’s plans to move to a more senior NASDAQ exchange, where a clean balance sheet and capital structure is required.

Now, with its total debt slashed in half to roughly $1.8 million, combined with its elimination of potentially toxic stock conversions, iQSTEL can focus entirely on building its brand by securing global deals, capitalizing on new and emerging opportunities, and filling niche markets in the broad-based communications sector.

At the end of the day, investors’ willingness to push valuations higher is supported by several company-driven accomplishments. Record revenues in 2020 put IQST in a position to build upon its already well-executed strategies. And while a 34% increase in YoY revenues doesn’t sound explosive, remember that it follows a 148% increase from the year before that was also a milestone filled year.

Further, while a “sum of the parts” equation could easily justify a doubling in share price, it may be better to allow some IQST facts to speak for themselves… Record revenues, sharply raised revenue guidance, seven operating subsidiaries, a presence in thirteen countries, and an ambitious plan to extend its reach into new and emerging multi-billion-dollar markets. To most, that will equate to a massive value and investment opportunity. Adding in a potential near term deal with a Fortune 500 company makes IQST even more attractive.


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