Shares in iQSTEL (OTC: IQST) surged on Thursday and at press time were trading 16% higher at $0.28 per share. That move, though, may only be the start of much bigger things to come for IQST, with investor's attention now focused on the company's record setting revenues and growth in its seven operating subsidiaries.
Even with the increase, the company's market cap stands at roughly $24 million. That valuation clearly shows some investors are slow to understand just how powerful this emerging cloud-based services company can become. However, an update from the CEO and an article published to Yahoo! Finance on Thursday is boosting this under-the-radar company's exposure. It indeed offered some education about IQST.
Undoubtedly, iQSTEL's story should be attracting value-minded investors that look for growth opportunities through companies that are penetrating high dollar markets. With a stable of IP assets, client agreements, subsidiary interests, and surging revenue, IQST checks all the right boxes for investor consideration.
Thus, the increase on Thursday could be the start of a significant move higher as investors focus on the company's consecutive months of record-setting revenue and its diversified subsidiary portfolio that serves multiple industries in thirteen different countries.
Reasons to like IQST are easy to find.
Record Revenues And Consecutive Monthly Growth
To investors attracted to revenue growth, IQST checks the box. iQSTEL published preliminary year-end revenues that increased by 148% on a year-over-year basis. That increase is supported by the company's strong finish to 2020, which posted consecutive monthly revenues of $5 million or higher in each of the past three months. After audit, IQST expects to post 2020 final revenues of roughly $44 million, also an impressive gain over the prior year. The even better news is that with the company's operating revenues surging, IQST raised its 2021 guidance to upwards of $60 million, which would add another 34% to its already posted triple-digit percentage increases.
Better still is that IQST has diversified its product portfolio in a way that positions itself to capitalize on multiple shots on goal in the coming days, weeks and quarters. And while iQSTEL started in 2008 specializing in Voice over Internet Protocol (VoIP), its current subsidiary interests have since expanded market presence into more modern communications services. Moreover, unlike smaller sector companies, IQST has built an infrastructure that may be unrivaled for a company its size. And its from that position of power and expertise that IQST has been able to establish numerous partnerships and client agreements that position IQST for additional record-setting performances in 2021.
Video Link: https://www.youtube.com/embed/0Ft-8IMZEVw
The Difference In A Game Plan
IQST's growth is speaking for itself. But, to those new to the company, an explanation of how they are driving record revenues is warranted. In simplest terms, iQSTEL targets specialized telecommunications opportunities that service both carriers and enterprise customers. Currently, IQST is focused on the continued development of opportunities in valuable Latin America, Africa, and Asia markets. They are presently operating seven subsidiaries that have a presence in thirteen countries. And, since iQSTEL has never shied away from strategic opportunities, don't underestimate their interest in taking advantage of merger and acquisition opportunities that could put other properties and locations under the iQSTEL brand.
Its services packages take advantage of high-dollar, high-demand markets. The effort capitalizes on 21st-century opportunities with the SMS messaging, VoIP services, and electronic payments markets. Notably, with COVID-19 causing a strain on global telecom, these opportunities have broadened to include new target markets and populations.
Another part of its game plan is to maximize its involvement in the emerging markets that are growing increasingly dependent on internet transactions. On that front, iQSTEL's ability to provide innovative and timely solutions to its IoT (Internet of Things) and Fintech base could translate into significantly higher near-term revenue creation. Multiple initiatives in each sector are already in progress, and a broader review can be read here.
What should be noted, though, is that the SMS market may be a misunderstood technology. In fact, while often viewed as a convenient form of communication between friends, its practical evolution has now made SMS an invaluable tool in the IoT and Fintech SMS sector. And IQST is building solutions that deliver a needed product to market that can add exponential long term value to the company. Numbers confirm that the company is on the right track.
Subsidiaries Gain Traction, Target Billion Dollar Market Opportunities
Moreover, its subsidiary ownership and interests are positioned in the right markets at the right time. As noted, iQSTEL is growing its brand by developing global opportunities. A particular market that management thinks can deliver exponential growth is in the International Long-Distance traffic market, where an estimated $13 billion a year is generated primarily through Wholesale Carriers that hold a 68% market share. But, while that stronghold is powerful, there are chinks in the armor as popular apps like WhatsApp and Facebook Messenger showed that competition can be created. Like those apps, iQSTEL is on its own mission to chisel away part of that wholesale carrier dominance with its own products and services.
They may start with Etelix.com USA LLC, a wholly-owned by iQSTEL that is finding success by providing international and domestic VoIP communications, 4G and 5G International Submarine Fiberoptic connectivity, and IP-PBX (Internet Protocol private branch exchange) services across Latin America, Africa, Asia, and the US. Another iQSTEL interest, SwissLink Carrier AG, provides VoIP communication services in Europe. iQSTEL has said that its next goal is to expand similar services into Africa and Asia, sustaining its rapid growth in that sector.
Another iQSTEL subsidiary company, QGlobal SMS LLC., operates internationally and domestically to provide Wholesale Carrier services to customers ranging from government levels to Enterprise markets. Notably, SMS services are becoming more present in commercial transactions. QGlobal SMS connects customers in the US, Latin America, and Europe to address an application-to-person SMS market opportunity expected to surpass $100 billion by 2030. Obviously, that can be big.
Notably, IQST already has deals in place with China Mobile (NYSE: CHL) and Telefonica (Movistar) (NYSE: TEF) to seize opportunities arising from a global market shift in communications services. Those two deals are projected to produce over 65% of upcoming revenues for QGlobal.
IoT Labs And itsBchain
Even more market-cap value is deserved from other IQST assets. Another subsidiary company, IoT Labs, targets specific markets as a developer of original equipment manufacturer (OEM) devices for industries that use IoT and AI services. The company offers global utility solutions using 4G and Low-Power-WAN providers, offering developments directly for end-users through OEM or monthly service agreements. IoT Labs flagship product is SmartGas®, a smart device used to measure LP gas tanks in households. Notably, the SmartGas® solution has been selected as the winner of the "Smart Appliance Product of the Year" award in the 5th annual IoT Breakthrough Awards program conducted by IoT Breakthrough, a leading market intelligence organization that recognizes the top companies, technologies, and products in the global Internet-of-Things (IoT) market today.
The company is also leveraging value from IoT Labs MX, a logistics service utilizing IoT, SMS, geolocation, blockchain, and financial technologies to support various business operations. They make products that use seemingly futuristic technologies and make them more practical for safe and simple transactions.
Further, IQST has a 75% ownership stake of itsBchain LLC, a company specializing in fraud-prevention in business deals. The company uses it's Mobile Number Portability Application (MNPA), allowing users and carriers to quickly transfer phone numbers during telecom transactions. itsBchain is also finalizing its Settlement & Payment Marketplace for payments over VoIP and SMS carriers, allowing for instant payment settlement as well as fraud prevention. The value of these services is no longer in the shadows. Neither is digital currency. In fact, the Fintech side of the industry is growing exponentially, with over $500 billion in annual remittances and over $1.5 trillion in annual mobile payments made. That market can be enormous for IQST.
Finally, iQSTEL made another deal. The company announced a new agreement with Payment Virtual Mobile Solutions LLC (PayVMS) that is expected to serve a substantial immigrant population by providing clients the ability to access a Visa Prepaid Debit Card service, make purchases, send money internationally or domestically, and make money management more effortless. Estimates put that market potential into the billions of dollars for all services combined.
A Rally That Needs A Rally
Although yesterday's 16% rally was impressive, it's likely only the starting point for a much bigger and sustained rally. In fact, the individual subsidiariy valuations of iQSTEL would probably each value substantially higher than the company's current market cap. And while each of the seven has potentially massive value, investors should still factor in the company's record-setting revenue growth, its market position in several highly lucrative sectors, and its ability to find and capitalize on accretive opportunities.
Another important note. In January, iQSTEL announced that it has reduced its overall outstanding debt by 48%, lowering obligations by over $1.5 million from $3.3 million. They also eliminated all derivative liabilities, including convertible debt and warrants. Those deals immediately position iSQTEL to more quickly benefit financially from its initiatives.
Looking both near and long term, the excellent news for iQSTEL and its investors is that because the company and its subsidiary interests are already tracking record revenue pace, investors have a better vision into bottom-line potential. Moreover, with IQST expecting to generate $60.4 million in 2021, investors could place themselves in a high growth company that may indeed, as they did in 2020, over-perform on their own guidance. If that happens, another pop higher may be in IQST's future.
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