SoundView Technology Group
Update on NXT-ID, Inc. (Nasdaq: $NXTD); EARLY
2018 OUTLOOK
SoundView
Technology Group (Boston) – April 18, 2018:
SoundView Technology Group (http://soundview.co) releases the following company update for NXT-ID,
Inc. (NASDAQ:NXTD).
NXT-ID (NXTD
$1.97)
EARLY 2018
OUTLOOK
APRIL 18, 2018
KRIS TUTTLE, KRIS@SOUNDVIEW.CO
Read this news in full at http://www.investorideas.com/CO/NXT/news/2018/04181Outlook.asp
Excerpt:
April 2018
Update
2017 was a busy
year for Nxt-ID. Revenues tripled to $23.3M from $7.3M in 2016. It took some
expensive financing to get it all done but now the company is in a much better
position and has cleaned up the balance sheet considerably. The last component
is a refinancing of their revolving debt which we believe will come soon (as
per recent management guidance.) This final step will dramatically reduce their
interest payments.
(For investors new to the NXTD story we recommend
you read the recent SEC 10K form - the first sections are well-written and the
most current detailed overview of the business. Here’s a link to the PDF of the NXTD 10K. )
We expect they will build on their success in 2018 -
primarily in expanding the FitPay business and extending their LogicMark franchise more deeply into the
healthcare industry.
But investors should be reminded that the company is rooted
in authentication and payments technology which allows them to continue to
innovate around new devices and payment devices. The advent of blockchain
technologies and crypto currencies has opened up an even broader range of
business development opportunities. In 2018 we expect Nxt-ID to debut a new
next-generation general purpose payment device.
LogicMark
LogicMark has been a steady growing business, making
consistent quarterly revenue progress. In 2018 we expect more of the same
backed by a broad range of updated products and expanded distribution and more
direct-to-consumer offerings that don’t require monthly service fees.
LogicMark is also working on expanding their role in the
healthcare industry from personal emergency response (PERS) units into
solutions for patient monitoring and chronic care.
For example, hospitals want to discharge patients as soon as
possible (often too soon) but face penalties and unreimbursed expenses if that
patient has to return to the hospital with a relapse. By discharging patients
with improved monitoring technology, the hospital can reduce the frequency and
severity of relapses and in many cases avoid re-admission.
At this point we are only modeling continued expansion of
the PERS business so we’ll be watching how the company develops their
healthcare market opportunity. The area is ripe, but we know that hospitals and
care-providers can be very deliberate in their adoption of new technologies and
are often hampered by regulations and prior investments in large legacy
systems.
There are some positive trends in healthcare that make us
cautiously optimistic. First of all, the pressure on the already-creaking
system is unrelenting. An aging population is only making current
inefficiencies harder to endure. On the technology side we have seen real
growth in modern methods like Telehealth. One example is the success of Teledoc
(NYSE: TDOC) which now has 23 million paying members and grew revenue last year
89% to $233M. The company expects to do $355M in revenue in 2018.
Fit Pay
More Fit Pay enabled devices will be rolling out in 2018.
Existing customer Garmin is adding “Garmin Pay” deeper into their product
portfolio and it should be available across more of their lineup by the end of
the year.
We also expect to see shipments of more innovative wearable
devices like the Token Ring LINK. We believe there is significant consumer
demand for some kind of “digital cash” option outside of the smartphone. So far
nothing has fit the bill and seen significant adoption but a raft of new
devices may change this.
Fit Pay has their own offering, the Flip, which is scheduled
to begin shipping towards the end of Q2. We think about Flip as kind of an
“EZPass” for your daily life. Small purchases should be easy and anonymous.
The Flip offering is about recurring account fees but they
will be small in magnitude. In 2018 this is still more about “design wins”
which translate into long-term recurring revenue streams in the form of small
activation and account fees.
We expect some significant new customers for Fit Pay in
2018, possibly as early as Q2. These will also reinforce the positioning Fit
Pay as a platform and a strategic asset. Any device-maker outside of Apple and
Google that wants to do payments would consider Fit Pay to be a key piece of
proven infrastructure.
ABOUT SOUNDVIEW RESEARCH
SoundView conducts independent
research – mostly on emerging technologies. We like thematic-driven companies
where technology is involved and use analysis to identify the most promising
investment opportunities.
Our business model is combination
of subscription fees along with some direct investments and advisory fees. We
measure our success by the quality of our analysis, accuracy of the conclusions
and the size and influence of our audience. We apply our own proven approach to
valuation that we call intrinsic value (IV) for informing investment decisions
and optimizing portfolio management.
IMPORTANT DISCLOSURES
1. The analysts who prepared this report certify that the
content expresses accurately their personal
views and opinions about the subject companies and
securities. The analysts have not been and
will not be receiving direct or indirect compensation for
expressing the specific views or
conclusions in this report.
2. Except where otherwise noted, clients or affiliates of
SoundView Research may own positions in
the securities mentioned and/or provide, have provided or may
provide advisory services to some
of the companies mentioned.
3. SoundView Research does not provide investment advice in
the form of “buy,” “sell,” or “hold”
ratings. This report is intended strictly for informational
purposes. We make no claims as to the
completeness or accuracy of this report although we have done
our best. We do not undertake to
advise you of any changes in to the information contained
herein.
4. SoundView is neither a securities broker/dealer/investment
bank nor a registered investment
advisor.
5. SoundView Technology Group does receive advisory fees, has
vested interests and/or may have
embedded biases in our work. However we strive to provide
“fact-based research” with a
balanced and unemotional analysis to reach the best possible
conclusions.
6. SoundView Research is solely responsible for all content–
whether it is created for a third party,
part of an advisory engagement or simply an expression of our
ongoing research and analysis. We
exercise final editorial control over all content produced
and any mistakes, omissions or errors are
our own.
Our research is distributed to institutions, investors,
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direct engagement it offers.
Contact:
Kris Tuttle
SoundView
Technology Group
617-828-6462
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