Borqs Technologies, Inc. (BRQS) is providing leading services in the software industry and IoT products. The company’s unique strength lies in its Android and Android Wear Licenses along with the development of 5G products for hotspots and phones. Most recently, the company purchased controlling interests in a solar energy storage systems company. Its stock price in the premarket session on April 18, was last checked to be $0.21 with a surge of 8.04%.
Introduction and Announcements
The most recent stir in the stock price of the company came on April 14, following the successful signing of revised licensing terms and conditions with Qualcomm for the acquisition of the 5G patent licensing contract. In comparison to its peers, such as IMMR, OSS, A LOT, and IVAC the company’s shares price gained approximately 8% over the month while the stock price of the peers also showed a percentage change of -0.21, 0%, 2.31%, 3.35%, and 0.19% respectively. According to the Grand View Research study, the volume of the international 5G services market is anticipated to rise at a CAGR of 52% through 2022-2030 and will reach $1.67 trillion through the forecasted period. The likely reasons behind the market growth include quickly rising low-latency data networks demand, which can provide improved mobile connectivity.
BRQS and its subsidiary, Holu Hou Energy LLC announced on March 30, the joint development and delivery of smart products for the electric vehicle and smart home sector, initiating with HHE branded EV charger and generator.HHE is also engaged in the novel business of solar energy storage as fossil fuel energy prices are anticipated to remain high in the future due to geopolitical tensions.HHE is poised to take advantage of rising prices as a result of estimated pricing efficiencies in comparison to fossil fuels.
BRQS stated that it won a design in February from the largest Indian mobile operator for the development of a Linux laptop adopting the Qualcomm chipset with cellular connectivity. The new model supports Linux OS with both mobile cellular and Wi-Fi connectivity. The company’s 73% staff is Indian national as it offers great potential for business opportunities.
The major catalyst forces driving the company’s stock in March and April include the acquisition of a 5G license with Qualcomm, the development of EV chargers and smart home products, and HHE getting benefits from high fossil fuel prices. The company’s stock down performed in March and April as the shares price declined, and remained between the high and low range of $0.35-$0.17. The chief reason behind the declining stock prices is the Russia-Ukraine conflict along with the declining trend in the overall tech sector due to the resurgence of the pandemic.
The company’s revenue expectations for the FY21 ended December 31, 2021, are in the range of $31-$35 million with approximate revenue growth of up to 30% in the FY20 when it was recorded to be $26.8 million. Also, the company’s management predicted considerable revenue growth for FY22 in the range of $45 million to $55 million from its central operations. The major contributor to the 2022 revenue will be HHE as it will complete its first full 2022 fiscal year of financial merger with BRQSand the management estimates that it will contribute $40-$50 million in contract value.
The company’s revenue declined during 2017-2020 as the company observed a revenue of $122 million in FY2017, $128.4 million in FY2018, $99 million in 2019, and $26.8 million (or -72.9%) in fiscal 2020 (due to the spread of the pandemic). In contrast, its annual diluted outstanding EPS followed an upward trajectory in the last four years with 2017’s EPS recorded to be -$0.98, 2018 to be-$2.30, 2019 t be -$0.96 and in 2020 it was -$0.80, the most in the four years. Its EPS showed a gain of 16.7% from the value in 2017. In comparison to its peers, OSS and ALOT, the company’s three-year performance remained dwindling at -95.8%, while OSS outperformed by 80.02% and ALOT down performed by -48.9%.
The total number of outstanding shares of BRQS is 195.7 million of which the insiders own 7.59% or 14.8 million shares. The institutional owners own approximately 1.19% of the company’s outstanding shares. No insider trading happened in the company in the past twelve months. The company’s stock showed a beta valuation of 1.84 along with a trailing twelve months price-to-sales ratio of 0.85 and the price-to-book ratio of 4.12.The company is short interest on April 18 by 2.54 million with a total volume of 8.18 million.
Analysts have rated BRQS buy as it has a huge potential to gain its pre-pandemic position back and its revenue forecast for 2022 in this regard is the proof that it is gradually climbing the stairs of success. No brokerage firms recommended the company’s shares as a sell or a hold. Only one analyst recommended it as overweight.
In light of the market volatility, BRQS stock is one of the major contenders for strong stock as it is a tech-based company. The technology-driven companies’ stock plus point is their potential to explode shortly as the world is turning more towards tech-based applications. Therefore, in the upcoming few years, it can grow its sales along with the expansion of its services to India and other Asian countries. While there are positives to technology-based stocks, also the negative points should be kept in mind. Given the stock’s highly volatile nature, an investment in the company is a bit tricky unless the investors have full confidence in the company’s policies.
The financial indicators of the company are showing positive changes made by it by adapting to the latest technology trends. BRQS was also granted 180 days extension by Nasdaq to regain its $1 minimum bid price compliance, which it will regain in the coming days. Thus, the company will fast track on the way to progress as the investors have started placing their trust in its strategies. It is worth mentioning that the recent gain in stock price by the company is the result of the successful acquisition of Qualcomm’s 5G license, which will anchor its steps in the 5G business.