DTGI - Digerati Technologies (DTGI) - A Discussion Candid Insightful
C-suite interview highlights. This report highlights a C-Suite interview with Digerati’s CEO, Arthur Smith. The video can be found by clicking here. Some of the topics covered in the discussion include the macroeconomic environment and the affects on the company; Digerati’s capabilities in serving many different types of customers; the company’s acquisition strategy; and a timely discussion on a recent acquisition in the growing market of Texas. Holding up to economic headwinds. Management does not believe demand for the company’s services has been affected by current economic headwinds, such as inflation and weakened consumer confidence. Although the ongoing supply chain disruptions have impacted the availability of some of the company’s products, Digerati has the technological flexibility to adjust its hardware solutions, when necessary, in order to minimize disruptions for customers.Driving for integration. The company is working on integrating with other customer relationship manager (CRM) systems to improve its customers’ experience. This is a continuation of an ongoing initiative by the company. Notably, Digerati has already had successful integrations with NetSuite and Microsoft Teams.Focusing on high growth markets. The company recently acquired SkyNet, a cloud communication and broadband solutions company. The $5.8 million acquisition expands Digerati’s customer base in Texas to 737 businesses, a 215% increase. The acquisition is expected to provide immediate cost synergies with the company's existing Texas operations. Management stated that the acquisition is part of the company’s strategic focus on Texas and Florida, two high growth markets.Outperform rating. We are reiterating our Outperform rating and our price target of $0.15 per share. DTGI shares trade at 2.5 times Enterprise Value to our 2022 revenue forecast and 28.3 times Enterprise Value to our 2022 EBITDA forecast, well below its peers, which trade at average EV/2022 Revenue and EV/2022 EBITDA multiples of 3.6x and 40.9x, respectively. Execution of the company's roll-up strategy in this attractive growth oriented market should lead toward higher stock valuations. Read More >>