Cyberlux Corporation (OTC: CYBL, $CYBL) stock may be consolidating at the low end of its monthly range, but don't be misled; this company is better positioned than ever to drive its share price significantly higher. And by performance, not hype.
In fact, CYBL provides all the ammo needed to support the bullish thesis and presents a compelling case for investment consideration, with strategic moves in 2021, strengthened by several more in 2022, that position CYBL to score its best year ever from an operations perspective.
Better still, revenues, which are already pressing record levels, should follow higher. And considering that CYBL has posted nine consecutive months of revenue growth, following that trend is more than an investor's friend; it could lead to appreciable gains far from baked into the current share price.
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Undervalued And Underappreciated Gem
Just the intrinsic value of its growing asset arsenal is enough to justify a price significantly higher than its current. However, even the most bullish targets, including 52-week highs, can be raised considerably and without hesitation after understanding each asset's inherent potential to their respective revenue-generating markets.
While individually reaching into the tens, even hundreds of millions, the more impressive number that should be in both the company's and investor's focus is the billions of dollars in play from CYBL's combined market opportunities.
It's there that this expected $44.5 million company can become a revenue-generating juggernaut. And the better news, CYBL says they are already on the way to making that happen.
CYBL Shifts Into Hypergrowth, Share Buyback Fuels Upside Potential
They aren't kidding, with ample evidence that its company is in hypergrowth, supported by its strategic plans in full execution mode and Operation Alpha delivering consistent growth and global market advancement. Results from those efforts show, indicated by revenues surging consecutively and on a comparative basis. But those revenues are just one facet of a growing Cyberlux. Another action in progress is also intended to create significant value for its shareholders- a Share Repurchase Program.
Investors should embrace that initiative. It does two things at the outset. First, the downside risk in CYBL stock is mitigated. But second, perhaps more importantly, it exposes a compelling fact- CYBL is positioned to allocate $19.5 million to the program. Those who trade nano-caps know that few, if any, other roughly $0.02 stocks can do the same. Remember, CYBL isn't sayingthey "may" do a share repurchase; they are doing one. And it's a differentiator and near-term value driver too big to ignore.
More importantly is the effect it can have on its equity structure, which is a fundamental metric for determining fair value. In CYBL's case, the plan is straightforward- reduce the number of shares outstanding to support higher share price multiples. According to CYBL's expectations, they expect its $19.5 million war chest to reduce that count by at least 20% based on current prices.
Of course, a change in share price can affect the program up or down. And with a case that CYBL's sum of its parts merits a stock price well above current valuations, buying at higher prices may be likely. Still, that wouldn't be a loss for existing investors. They would benefit from the price increase and the likelihood of the buyback program fueling momentum to the upside. It could also initiate a reckoning with any investor short the stock.
But really, here's the thing to know. Cyberlux is repurchasing shares from available cash flow. In other words, reading between the lines, CYBL is growing exponentially.
Revenues Impress, Show Consecutive Growth
Frankly, there's no need to read between the lines; CYBL is telling the story themselves. In June, they announced that results for both Q1 2022 and the previous 12-month period are, in their words, "simply amazing." CYBL noted that its past four quarters, including Q1 2022, are by far the best four quarters in both revenue and net income results in its history. Revenues surged to over $6 million in Q1 and over $13 million in a 2021 comparison attributed to its Operation Alpha delivering income far ahead of its plans. Results support that claim.
CYBL revenue in Q1 2022 exceeded its Q1 Plan by 39%. That beat is more impressive, knowing that from a historical perspective, Q1 is its slowest quarter of business. But while Q1 revenue growth is substantial, CYBL also reported generating a comparative YoY gain of over 1525% and Q1 net income of $1.2 million, which resulted in its second-best quarter ever, despite its robust investment into its Business Units intended to drive 2H 2022 growth.
By the way, growth is intact. After Q1, CYBL posted April revenues of $2.46 million. In addition to that number being 23% higher than its original guidance, it also contributed to Cyberlux announcing that for the first time in its history exceeding $2 million for three consecutive months. The report gets better. It also included that the April revenues marked the ninth month of consecutive Cyberlux revenue growth, showing revenue-generating momentum is at its back. That was proven by an impressive guidance beat.
In its update, including April totals, Cyberlux announced posting $8.7 million in revenue (Jan-April) versus its guidance of $6.5 million, a 34% beat. Better still, those YTD comparative beats are across the board. Income from its Digital Platform Solutions unit was 47% higher than expected, 31% over expectations in its Unmanned Aircraft Solutions unit, 16% above guidance in its Advanced Lighting Solutions unit, and an impressive 27% higher comparably in its Infrastructure Technology Solutions unit. The numbers are expected to get much bigger, with CYBL reiterating expectations of reaching updated revenue targets of $44.8 million this year.
Likely, they won't disappoint.
A Value Disconnect Exposed
They certainly have the assets to deliver as expected. Actually, looking for a revenue beat may be a more appropriate expectation. In addition to its business units that are already driving revenues higher, in 2021, CYBL closed five acquisitions: the first for UAS technology and capability, three for advanced infrastructure technology and global resources, and the fifth to boost its infrastructure software. Now, with those assets under CYBL control, a busy 2021 has set CYBL up for a breakout 2022.
Today, all tolled, CYBL can leverage its acquired assets' intrinsic strength and inherent potential to open, penetrate, and exploit new markets, which combine to put an estimated $800 billion annual market potential in its operating crosshairs. Don't think CYBL is underestimating its potential.
They are on record saying that its portfolio of assets could help deliver at least $200 million in revenue by 2025. During one recent conference call, a stretch goal of over $300 million was mentioned by the end of the decade. However, if all goes according to plan, that timeline to reaching $300 million or more could happen faster.
Momentum And Products To Become A Significant Industry Player
Remember, CYBL is no rookie to software development or creating digital and technology-driven solutions. Over the past four years, it has invested over $20 million to fortify its Digital Platform Solutions (DPS) business unit. The result is a comprehensive, efficient, and technologically-advanced platform that positions CYBL to target business from clients across multiple industries. Not only can they target a global client list, but their software solutions are also considered a vital contributor to the digital transformation evolution by its differentiation.
Unlike most, CYBL's design provides a holistic approach to delivering digital capabilities across many industry verticals, helping automate processes, enhancing digital experiences, accelerating new product/service time-to-market, and evolving their business models.
Moreover, with solutions that can be delivered to a variety of industries to enable a better customer experience, efficient operating models, and information/data transformation in its offerings, CYBL is doing more than seizing its opportunity in a massive, almost trillion-dollar market through recent acquisitions. They are also steadily making end roads with the products and services already developed, including its End-to-End Platform, a crucial tool designed to provide better customer engagement and experience through a personalized App.
That product is supported by automation processes, which utilize advanced algorithms to optimize operations based on variables such as demand, resource availability, location, equipment needs, and other factors. The better news...clients need it.
It's a crucial platform piece allowing clients to grow at scale and provides the ability to integrate into existing legacy systems and future technologies. That's not all. It also is critical to providing meaningful customer experiences and helps clients realize inherent business value by maximizing data-driven decisions. In other words, it helps clients find the dollars falling through the business cracks.
More To The Value Proposition
Frankly, there's much more to CYBL than what's been noted. They also offer impressive IT consulting solutions to help clients acquire, engage, and grow their customer base provide on-demand highly-skilled IT staffing resources.
In addition to that, potentially massive revenue opportunities are expected to come through CYBL's Unmanned Aircraft Solutions (drones), a market that, in and of itself, puts an $85 billion market where CYBL's sights with the know-how and sector expertise to earn them a significant share of that massive market opportunity. Matched with the DPS group software capabilities, we assume advance AI and machine learning will be next on the agenda for the UAS drone group. Thus, investors evaluating the CYBL investment thesis need to take the totality of dollars already in play. While several near-term drivers can send CYBL's share price significantly higher, the mid to long-term drivers can have an exponential effect.
A Justified Cause For A Surge In 2H/2022
Heading into the back half of 2022, there's plenty to support the bullish proposition. Acquisitions and legacy assets have generated a revenue-generating tailwind that should continue CYBL's consecutive streak of increasing revenues.
But just as important, when markets catch their footing, investors will likely appreciate that CYBL is a much stronger company today than when it posted its string of record-setting financials and traded at prices more than 313% higher than current levels.
And when they do, supported by 2022 revenue guidance of over $44 million, a $19.5 million share repurchase program, and an acquisition strategy expected to add more accretive value, they could unload plenty of purchasing firepower to send share prices appreciably higher. If that's the case, investing sooner than later in an undervalued CYBL may be wise and timely.
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