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Vuzix 2Q19 results -2
13:01 09-Aug-19
The Vuzix conference call was similar to those I've heard from
startups with real potential but which clearly haven't quite made
it yet... Lots of talk about huge market sizes, potential orders
and great technology. The only hard number, though, was shipment
of 2 thousand 300 series models to Dynabook (Toshiba).
Here are the other points that do matter in my mind:
- moving to all wave guide products going forward
- Android & hardware upgrade for new models available in 4Q19
- no break-even this year, cash for operation through 2020
- military clearance as early has 2H 2020
Management did go on about things like being the #1 smart glasses
product on Amazon with no marketing, license tech to 3rd parties
for products other than glasses, an upcoming Verizon real-time
language translation via 5G,partnerships, exclusives, etc. I
think many of the applications will have real appeal, but none of
it outweighs that my experience that mass manufacturing is hard,
which makes me question the cash position statement. Furthermore,
my macro view is that mass sales are probably about to become
hard.
Vuzix has already been on the radar of some big players, like
Intel, and I think the technology is finally getting good enough
that an angel deal is possible. Without that, though, results
from 4Q19 and 2020 are the possible inflection point. That puts
us back where I started coverage, with the upcoming quarter being
the chance to bottom-fish, at price points well below $2. For
those who are so-inclined and patient, the potential reward could
still be well worth a little risk. However, in the absence of
anything more concrete, this will probably stand as all I have to
say about the stock for the next several months.
Vuzix has announced its second quarter results:
- a loss of 20 cents per share misses by 2.5 cents
- from $2.2M of revenue, which misses by $600K
Management says some orders were deferred to wait for the upcoming M400 smart glasses, and that it has discounted the 300-series models. It also professes visibility toward "multiple customer wins" for both the Blade and M-series products. Some new orders have been documented recently, but without hard #s, I suspect the market will be unwilling to give the company much credit. The conference call is at 8:30 and I will probably circle back to it after CUI.