Research Alert: SoundView Technology Group Issues NXT-ID
(NASDAQ: NXTD) Update; Wocket Working Towards CES
BOSTON - December 3, 2014 (Investorideas.com Newswire)
SoundView Technology Group (http://soundview.co) releases the following market and company update
for NXT-ID, Inc. (NASDAQ:
NXTD).
Market & Company Update
WOCKET WORKING TOWARDS CES
KRIS TUTTLE – DECEMBER 1, 2014
KRIS TUTTLE – DECEMBER 1, 2014
Investors have come to realize that the
"revolutionary" Apple Pay is a continuation of the existing
credit/debit card model and payment infrastructure. It adds a layer of security
and convenience but the back end is still the same. In other words, we are
digitizing the plastic part of the existing payment system rather than doing
something profoundly new and different.
There is a simpler and more direct way to
digitize your credit cards. Using a digital wallet like the Wocket, the myriad
separate plastic cards are replaced with one reprogrammable card that behaves
as whatever card the user selects. Not only does this also use the same back
end systems in place, but it also works with all the existing front-end systems
for credit and debit cards.
Major retailers like Home Depot have
launched major investments to upgrade their own infrastructure with security
enhancements that will work with all transactions. This is key point –
retailers need to offer safe, secure and smooth checkout for all customers and
payment types, not just Apple Pay.
So for us, this puts solutions like the
Wocket in a favorable position with respect to other solutions involving all
non-cash transactions. Consumers can keep their existing cards, pay any
merchant, and have no worries about security, fraud, battery life or other
"technical issues" that bedevil many existing phone-based offerings
from QR codes to NFC.
As many failed Kickstarter projects attest
– it's exponentially more difficult to launch a real consumer product at scale
than make a slick video showing a magical solution, like "Coin" for
example. When you get into the nitty-gritty of different cards and formats
needed to support all cards and not just the easy ones, some real technical
innovation is needed.
NXT-ID has been hard at work for months,
finalizing their Wocket so it's ready for CES in early January. As they have
worked through the design, they have overcome thorny issues ranging from
accurately capturing different types of cards to engineering the Wocket card to
contain all the needed electronics, yet still remain just a millimeter thick.
We still expect their initial production
run to happen during December and for first commercial units to be in use
during January. CES will be a coming out party for NXT-ID with mainstream
buyers, partners and the broader media outlets. Based on what we know, the
feedback should be validating and positive, but we will have a better gauge of
that post-event.
NXT-ID has been preparing their production
facilities to ramp up to much higher volumes, which should be able to meet
initial consumer demand and improve steadily during 2015. A review of our
current IV estimate (attached) indicates the planned ramp provides plenty of
room for NXT-ID to exceed our expectations, as long as they continue to execute
and consumer acceptance and adoption provides the market opportunity.
Stock Conclusion
The market has been taking a "wait and
see" attitude with respect to the shares since the end of the summer when
it became clear that commercial volumes wouldn't happen until 2015. We won't
try and predict market sentiment on NXTD, but if the company meets current
plans for early commercial units by December and has a solid debut at CES, the
shares will have put in a bottom.
We plan to share more data points in December
as production work continues. Our IV of $8.18 makes the shares very attractive,
albeit with some expectation of success built into the estimate. If the company
meets their plans in 2015, it would push our IV estimate up to $17.42.
It's also a good time to keep a careful eye
out for indiscriminate tax-loss selling during times when volumes are low – it
can create some extra volatility. Based on the outlook for next year, we'd be
looking to exploit that opportunity should it materialize.
The NXT research update (PDF) is also
published and available here: http://s3.amazonaws.com/PUBLISHED/NXT-ID_NXTD_SV_NOTE_DEC_2014_PUB.pdf
Past reports and related research can be
found on our website at: http://soundview.co/infosec
Read this release
in full at http://www.investorideas.com/CO/NXT/news/2014/12031.asp
About NXT- ID Inc. - Mobile Security
for a Mobile World (NXTD) (NXTDW):
NXT-ID, Inc.'s innovative MobileBio®
solution mitigates consumer risks associated with mobile computing, m-commerce
and smart OS-enabled devices. The company is focused on the growing m-commerce
market, launching its innovative MobileBio® suite of biometric solutions that
secure consumers' mobile platforms led by the Wocket™ ; a next generation smart
wallet designed to replace all the cards in your wallet, no smart phone
required. The Wocket works anywhere credit cards are accepted and only works
with your biometric stamp of approval. www.wocketwallet.com.
NXT-ID' wholly owned subsidiary, 3D-ID LLC,
is engaged in biometric identification has 22 licensed patents in the field of
3D facial recognition http://www.nxt-id.com, http://3d-id.net.
Disclosure: SoundView Technology Group is
providing fee-based advisory services to NXT-ID on investment positioning,
strategy and business development. Our research opinions are our own and based
as much as possible on factual information and observations. Additional
information about SoundView can be found at http://soundview.co.
Contact:
Kris Tuttle
SoundView Technology Group
kris@soundview.co
+1-617-828-6462
SoundView Technology Group
kris@soundview.co
+1-617-828-6462
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