Net Element, Inc. (NASDAQ: NETE) is already working on both its funding needs and the performance of its Mobile Solutions Segment, as cited by SeeThruEquity’s updated report of April 12, 2017 (http://nnw.fm/w1vK5). In the report, the equity research firm maintained its price target on NETE stock of $2.45 per share. The company in FY2016 reported $54.3 million in sales, representing a 35% gain over the $40.2 million revenues in the 12 months of 2015. SeeThruEquity now projects Net Element’s 2017 sales as reaching $62.9 million.
Net Element is a global financial technology group that processes electronic payments in an omni-channel environment, including e-commerce, point-of-sale and mobile devices. It is segmented into three groups: North America Transaction Solutions, Mobile Payment Solutions and Online Payment Solutions. The firm also provides analytical tools, fraud management, and point-of-sale solutions.
In the report, SeeThruEquity made note that North American Transactions, and its processing, drove company sales in 2016, generating $42.1 million, a 54% jump from the 2015 revenues. Its sales accounted for 78% of total Net Element revenues in 2016. The research firm expressed concern about the performance of the Mobile Solutions segment, which experienced a 34% drop in sales in 2016 to $6 million. Also, it noted Net Element’s balance sheet, asserting that it will require more than $5 million to meet its marketing plan over the next 12 months and repay the debt incurred in its PayOnline acquisition.
Yet, SeeThruEquity said it is intrigued by the company’s high risk/high reward profile in the financial technology sector. It added that Net Element is broadly following SeeThruEquity’s expectations following its 3Q16 financial results and reverse stock split. Its 2017 revenue projection for Net Element is based on continued growth in North America transaction processing and online payments. It has already factored in a decline in mobile payments.
On March 1, 2017, Net Element entered into an 18-month promissory note with Star Equities LLC in the amount of $348,083, the company said in its SEC 10K for the year ended December 31, 2016 (http://nnw.fm/TrU23). A balloon payment is due in September 2018. Oleg Firer, CEO and director of Net Element, is also chairman and managing member of Star Equities. Net Element also said that the number of payments processed through its Mobile Payment Solutions segment declined by 19% in 2016 and that was due to a shifted business model. The company now has moved to a subscription/recurring payment model from its one-time transactional business of the past.
For more information, refer to www.NetElement.com
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