Breaking Tech News: NXT-ID, Inc. (Nasdaq:NXTD;
NXTDW) Research Note Update from SoundView; Commercial Ramp of Wocket Smart
Wallet
BOSTON
- May 19, 2015 (Investorideas.com Newswire) SoundView Technology Group issues a
new research note on the NXT-ID, Inc. (NASDAQ: NXTD; NXTDW) Wocket smart
wallet (www.wocketwallet.com)
The following is an
excerpt to the report.
The full update is
available for download here:
Company Update
Back in March we
published an NXT-ID update note on the first "early access" Wockets
shipping which allowed the company to gather feedback from field use. I had
good success with my own Wocket even though it was a pre-release version which
had a handmade prototype card that was too thick for some types of usage.
Sixty days later,
NXT-ID is preparing to fulfill their existing pre-orders this month which will
put several hundred units into the market. The plan for June is to ship a few
thousand units to customers who have requested invitations to order a unit. By
July, the company should reach their baseline production capability of 10,000
units/month, which will coincide with initiatives in marketing and sales as
well as some new distribution partners who will help with market penetration
and fulfillment.
What follows are
some new usage notes for the commercial version and a restatement of our
assumptions behind our model that supports an NXTD intrinsic value of $8/share
for 2015 and path to $17 in 2016.
Using the New Wocket
I took my updated
Wocket out for a spin and noticed a few additional features. First of all, the
card is production quality and has my name on it. It's thin enough to put into
any device from swipe to dip to full insertion, so I can use it in any
scenario. There's also a subtle backlight, so it's easier to use in the dark
which comes up in cabs and romantic restaurants.
There is one new
minor feature that turned out to be a major benefit for me – the
"note" option. I believe that this is a giant differentiator between
the Wocket and "smart card" solutions like Coin. The Wocket has a
place that effectively eliminates all those little slips of paper you often put
in your wallet – like the access code for a gate you sometimes go through, the
number for AAA and your membership number, your passport number, etc. These all
fit into a class of information that is short, alphanumeric and seldom used.
Yes, you can have all of this on your phone, but that's not the best place for
it in terms of security or ease of access.
The day to day use
of the card works just fine in all types of scenarios – we used both Visa and
American Express credit cards, and a debit card too. Again, we found the
awareness level of the technology in general "that's one of those cards
you can store all your cards on." Where discussion ensued, the top issue
was security. When I described the encryption, lack of network access, PIN and
biometric identification, every person responded favorably across a broad
demographic range. Anecdotally I'd say the older a person was, the more
concerned they seemed to be with security and the more thrilled to feel that
they could make their cards more secure with this kind of approach.
Not every reader
works with the Wocket, so one does need to keep a single card along with your
ID or license in the extra pocket. For example, my tennis club in NY is a small
one with a reader literally taped to the counter and it wouldn't swipe the
Wocket card even with several attempts. Our sample size isn't big enough to
make specific predictions, but for us we had about a 9 out of 10 success rate.
Not 100%, but for me good enough. It's worth noting that the design of the
Wocket doesn't prevent it from eventually reaching the goal of 100% acceptance
but it's not there yet.
Conclusion
NXTD investors have
had to endure fairly high volatility as the shares surged on news of initial
shipments and sagged as the company went into "heads down mode" to
iron out the last bits for commercial production and get manufacturing scaled
up to begin to deliver pre-orders.
In our March note,
we pointed out the two remaining major risks as the production ramp and
consumer reaction/adoption. Now that we have a production unit in our hands and
pre-orders are to be filled this month, the production ramp risk is fading away
and the focus will now shift to consumer adoption.
Fortunately, NXTD
is not alone in their enthusiasm for the Wocket. Ever since CES in January,
there has been strong and steady interest from a range of distribution
partners. We expect the ramp in marketing in the July timeframe will coincide
with one or more of the smaller partners helping the Wocket to reach more
consumers.
We remain
comfortable with our 40,000 unit assumption for 2015, which we will revise if
the company succeeds in reaching close to 10,000 units in July or August.
Aggregating a number of market data points, there is initial demand from early
adopters for something like 100,000 to 200,000 units right now, and this number
will increase as more people see, feel and use the technology.
Despite a few
delays, the company performance is consistent with our existing IV model shown
below and we are not making any changes to it yet. Our current IV estimate
remains $8 for this year and would step up sharply to $17 in 2016 with
continued success.
We do plan to break
down our volume and revenue estimates into quarterly periods so we can compute
annual trajectory more accurately. Based on current plans, NXT-ID should be
able to produce close to 30,000 units in Q3 and even more in Q4. Obviously, if
the demand is adequate, they would greatly exceed our current 40,000 unit
target for the year.
Our full update is
available for download here:
Read this release
in full at http://www.investorideas.com/CO/NXT/news/2015/05191.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 Wocket®; a
next generation smart wallet designed to replace all the cards in your wallet,
no smart phone required. Wocket was recognized as one of the top technology
products at CES 2015 by multiple media outlets including Wired.com. The Wocket
works anywhere credit cards are accepted and only works with your biometric
stamp of approval. http://www.wocketwallet.com/
NXT-ID' wholly
owned subsidiary, 3D-ID LLC, is engaged in biometric identification and has 22
licensed patents in the field of 3D facial recognition http://www.nxt-id.com/, http://3d-id.net/
About SoundView Technology Group
We are an
independent advisory and research firm specializing in emerging technologies as
they reach commercialization. Our proprietary research and modeling work
provides valuable information for company management teams and investors in
these emerging opportunities. We regularly publish our findings across a
variety of channels including all the major retail and institutional
information outlets. SoundView is based in Boston, Massachusetts with locations
in New York and Connecticut.
Disclosures
SoundView analysts
do not receive compensation for their research opinions, any specific views or
conclusions. They are tasked to provide fact-based research with sound
analysis. SoundView does not provide investment advice or make
"buy/sell/hold" recommendations. Nor do we provide investment banking
or brokerage services. We act as a publisher of our own research work and are
responsible for all content which is correct to the best of our abilities but
by no means should it be relied upon without further validation and
confirmation. SoundView provides paid advisory services NXT-ID on their
business plans, technology description and investor positioning
Any questions please contact:
Kris Tuttle
Director of Research
SoundView Technology Group
kris@soundview.co
617-828-6462
Director of Research
SoundView Technology Group
kris@soundview.co
617-828-6462
Published
at Investorideas.com
Sign up for free news alerts
Disclaimer/Disclosure:
The Investorideas.com newswire is a third party publisher of news and research
as well as creates original content as a news source. Original content created
by investorideas is protected by copyright laws other than syndication rights.
Investorideas is a news source on Google news and Linkedintoday plus hundreds
of syndication partners. Our site does not make recommendations for purchases
or sale of stocks or products. Nothing on our sites should be construed as an
offer or solicitation to buy or sell products or securities. All investment
involves risk and possible loss of investment. This site is currently
compensated by featured companies, news submissions, content marketing and
online advertising. Contact each company directly for press release questions.
Disclosure is posted on each release if required but otherwise the news was not
compensated for and is published for the sole interest of our readers.
Disclosure: As of January 1, 2015 NXT-Id renewed for five thousand per month
and long 144 shares for news publication and marketing of Wocket smart wallet.
More info: http://www.investorideas.com/About/Disclaimer.asp and http://www.investorideas.com/About/News/Clientspecifics.asp
