Geeks on Call Holdings, Inc.
Geeks on Call Lands Sam's Club - We are ExpectingRevenues to Double in Fiscal 2009 – Raising our Six-MonthPrice Target to $3.00
Geeks on Call today announced it will begin offering outsourced IT services out of Sam's Club locations. The services, which we believe are modeled after Best Buy'shighly successful Geek Squad business will initially target 20 Sam's Club locations. Inour opinion, this is a company making event, on which investors should capitalize bypurchasing these shares. As a result of gaining this contract, we are raising our six-month Price target from $2.00 to $3.00.
We view this trial as only the beginning of a much more extensive rollout of services,which we believe, could eventually encompass all Sam's Club locations.
As computer and consumer electronic technologies become increasingly complexbusinesses and consumers are increasingly turning to outsourced IT services. Thismarket is growing rapidly and currently valued in excessive of $8 billion for the USalone. It is estimated the market is underserved by an additional $11 billion due to alimited selection of reliable vendors. We believe GOCH is well prepared to target this$19 billion market opportunity.
Over the coming months we are expecting the company to announce an additionalsignificant expansion in operations due to the enrollment of several nationalfranchisors into a newly created Endorsed Vendor Program positioning Geeks On Callas the preferred provider of IT services to the franchise community. We believe theseevents will be additive to our revenue model and will significantly accelerate revenuegrowth at the company.
With a market capitalization of only approximately $17.5 million we view thecompany as meaningfully undervalued relative to the significant market opportunityand thus urge small-cap investors to seriously consider purchase of these shares.
Revenue ForecastConservative CaseEPS FY2008 FY2009
Q1 $1.6A $2.5EQ2 $1.4A $2.9EQ3 $1.3E $3.6EQ4 $1.7E $4.0EYear-End $6.0E $13.0EPrice/Sales 3X 1.3X
Revenue ForecastAggressive CaseEPS FY2008 FY2009
Q1 $1.6A $2.8EQ2 $1.4A $3.5EQ3 $1.3E $4.1EQ4 $1.8E $4.3EYear-End $6.1E $14.7EPrice/Sales 3X 1.1X
Market Cap (MM) $17.5Shares Outstanding (MM) 14Float n/aDividend Yield n/a52-Week Range $1.00-$2.85
Revenue FY 09E (MM) $13.0 (E)Cash end of Last Quarter (MM) $1.4Total Assets (MM) $3.2Long-Term Debt (MM) noneShareholders Equity (MM) $1.8
Update ReportRating: BUYOTCBB: GOCHCurrent Price $1.006-Month TargetPrice: $3.00
Joseph Noel firstname.lastname@example.orgEmerging Growth ResearchSan Francisco, California925.922-2560
I, Joseph Noel, herebycertify (1) that the viewsexpressed in this researchcompany report accuratelyreflect my personal viewsabout any or all of thesubject securities or issuesreflected in this companyreport, and (2) no part of mycompensation was, is, orwill be directly or indirectlyrelated to specificrecommendations or viewsexpressed in this companyreport.
July 24, 2008
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