Kinstlinger upped his price target on NXTD to $6.00 from $5.00 Wednesday, implying upside of more than 60%. The analyst also reiterated a Buy rating on the stock. (To watch Kinstlinger’s track record, click here)
Kinstlinger wrote, “NXTD raised $7 million through the sale of 1.75 million shares at $4.00 each. This opportunistic raise followed a 250% increase in the stock related to the announcement that it was developing a payment platform for cryptocurrencies. Most important to shareholder value, in our opinion, is paying down its roughly $15 million in debt which has an effective interest rate of about 20%. We believe the majority of the capital raise will be used for debt reduction. In fact, NXTD had posted an operating profit in 1Q17 and 2Q17, but that was more than offset by interest expense. While delays related to Flye Card deliveries hurt 3Q17 and 4Q17, lower interest expense positions NXTD for GAAP profitability as revenue reaccelerates.”
“NXTD is in the process of cleaning up its balance sheet and at the same time, striking what appears to be lucrative deals that will establish its technology for the wearable payments sector. Other than paying down high cost debt, we believe the biggest near-term catalyst is activation of payments capabilities on the new Garmin smart watch in 1H18. We also argue that new technology to allow for payments to be transacted using cryptocurrency could drive additional growth,” the analyst continued.
NXT-ID provides a comprehensive platform of technology products and services that enable the Internet of Things (IoT). With extensive experience in access control, biometric and behavior-metric identity verification, security and privacy, encryption and data protection, payments, miniaturization and sensor technologies, NXT-ID develops and markets groundbreaking solutions for payment and IoT applications.