OSS - One Stop Systems Inc. (OSS) - Second Quarter Tops Estimates; Raising PT
2Q21 Results. Revenue totaled $14.9 million, up 12% sequentially and 28% year-over-year. OSS reported GAAP EPS of $0.09 compared to $0.00 last year. Adjusted EPS for the second quarter of 2021 was $0.04, compared to $0.01 last year. Adjusted EBITDA rose to $1.4 million, up $1.3 million year-over-year. We had projected revenue of $14.4 million and adjusted EPS $0.03.Business Pipeline. During the quarter, One Stop Systems won three more $1+ million programs, bringing the YTD total to six. One of the wins was with a major vehicle supplier in Germany, expanding the Company's footprint in the autonomous vehicle market. The pipeline remains robust with some 17 $1+ million opportunities being worked on.Improved Capital Structure. OSS ended the quarter with $18.5 million of cash and short-term investments reflects the March $10 million capital raise. Debt totaled $4.3 million. During the quarter the Company's $1.5 million paycheck protection loan was forgiven. The Company's financial condition has improved significantly over the last year and we believe OSS is well positioned to internally finance expected near-term growth.Updated Projections. As the operating environment continues opening up, we expect the Company to post sequential improvement throughout the year. For the third quarter, we project revenue of $15.9 million, up 7% sequentially and 23% y-o-y. Gross margin is projected to improve modestly from the second quarter. We are projecting adjusted EPS of $0.05. For the full year, we are estimating revenues of $61.1 million and adjusted net income of $3.8 million, or an adjusted $0.19 per share, with the EPS increase driven by improved gross margins and operating leverage.Maintaining Outperform. We believe OSS presents investors with a favorable risk/reward, especially in light of the Company's exciting growth potential. We are maintaining our Outperform rating and raising our 12-month price target to $8.00 from a previous $7.00. At our PT, OSS shares would trade at 2.4x on a EV/estimated 2021 revenue and 2.1 on our 2022 revenue estimate. Read More >>