It seems that the buzz right now is that with the current market volatility, institutions are looking for predictable, conservative earnings growth. I don't know whether Levy did this on purpose, but this is exactly what RATL offers those institutions.
They have:
1) Backlogged revenues the last four quarters
2) Backlogged revs in what has been historically their weakest quarter
3) Basically can't miss their numbers for atleast the next three quarters
4) Have large amounts of cash
5)Have guided analyst estimates higher (did suffered from overall market reaction and did not get the price jump they expected)
6) Have steadily built a solid, predictable and deliverable growth pattern that, with the upside potential of the RATL business model, clearly has to emerge as one of the most attractive tech stocks in this current market.
Now, I would like to see him meet his earnings estimates on the nose, backlog revenues again and guide analysts higher. This will essentially accomplish the same objective as exceeding the earnings estimates and will send a far more powerful message to the institutions investors... "We CANNOT miss our numbers. We have a conservative financial approach in a high growth sector with the right partnerships. We are the ideal choice in a volatile market "
Take a look at proxy companies PLAT and SLCTY. Below is 3 month highs, lows and current
PLAT 32.75 17 17.25
SLCTY 5.25 .75 .9688
RATL 18.75 11.25 16.625
Do we need to include CAYN?
The bottom line is that RATL has clearly weathered this storm where their competitors are getting slammed. RATL's numbers over the past three months are clear indication that institutions are buying into Levy's strategy.
Best case scenario is that Levy does meet estimates, backlog and guide analysts higher. Now, the Gartner IT Expo is the same week that RATL reports earnings. A well coordinated earnings report with some RATL press initiatives at Gartner could create a solid buzz. Institutions are heavily represented at the Gartner conference. People at Gartner Expo will see the PR initiatives, go look at RATL financials for the past year, see another solid quarter, see another quarter with backlogged revs and a predictable, conservative growth pattern and those people may jump into RATL in a big way.
If this plays out, we could have a nice run on our hands.
Overall, I think RATL PR has been pretty weak, so I am not holding my breath. However, I think Levy's strategy is rock solid and is a huge statement to institutions looking to mitigate their risks. |
