OSS - One Stop Systems (OSS) - Notes from the NobleCon 18 Presentation
NobleCon 18. One Stop Systems CEO David Raun and CFO John Morrison were hosted by us at NobleCon18. The major highlight from the presentation was their strategy in edge computing, particularly in AI Transportables. A rebroadcast is available at https://noble.mediasite.com/mediasite/Catalog/Full/4ec6170801b441318e66ea53d53540a421.A Growing Market. Global Edge Computing is estimated to grow at a 38.4% CAGR to $61.1 billion in 2028 from the reported $6.3 billion in 2021. Alongside this, an estimated 75% of data processed will be through edge computing vs. 10% in 2018. This increase in data will help the Company, in our view, as the ever-growing amount of data in various industries will need to be processed in real-time, including the military which is a target market of OSS.Focus on Transportables. As for the AI Transportables market, it is expected to grow to $2-$5 billion from an estimated $200-$400 million in 2022. Management highlighted that they are one of the few businesses in this market that has a license from Nvidia for their NVLink, which provides a unique advantage to their product, in our view. Autonomous trucks is the Company's largest focus at the moment, with the Military not far behind, as they are engaged in watercraft, drones, and submersibles.Autonomous Trucks. Economics behind autonomous trucks can prove to be a boon for OSS, in our view, as the decrease in truck drivers and lower operating times favor autonomous trucks. One Stop is currently shipping to three market leaders in the space, with further interests from other leaders. Management noted that this space will be in some of their top accounts in this fiscal year and next.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 our 12-month price target of $8.00. At our PT, OSS shares would trade at 2.0x on a EV/estimated 2022 revenue and 1.8 on our 2023 revenue estimate. Read More >>