Paradigm Capital analyst Daniel Kim thinks Siyata Mobile (TSXV:SIM) is ready to make a splash in the United States.
This morning, Siyata Mobile announced it had begun the technical device approval process for its Uniden UV350 4G/LTE in-vehicle connected cellular device with an unnamed Tier 1 operator in the United States. The company says the device is the first and only in-vehicle connected cellular device with push-to-talk-over-cellular compatible on band 14.
“We are very pleased that within only three months of launching the UV350, it has been recognized by a Tier 1 cellular provider in the United States as an innovative device with unique features for commercial fleets,” said CEO Marc Seelenfreund. “This is a very meaningful milestone for the company and is a fundamental step towards entering the large-scale opportunity in the United States.”
Kim says this development opens the door for Siyata to have success in the United States.
“There are over 12M commercial vehicles in the U.S. and 3M in Canada, and we estimate SIM’s existing fleet represents one-quarter of the total opportunity (4M),” the analyst says. “Assuming a relatively small percent convert per year, for example 100K (2.5% of total), would imply $100M in potential revenue, which we estimate would generate $20–$25M in EBITDA to SIM. If we consider other top carriers in the U.S., this would increase the opportunity by 2.5-fold.”
In a research update to clients today, Kim maintained his “Buy” rating and one-year price target of $0.85 on Siyata Mobile, implying a return of 31 per cent at the time of publication.
Kim thinks Siyata Mobile will post EBITDA of $2.1-million on revenue of $22.8-million in fiscal 2017. He expects those numbers will improve to EBITDA of $6.8-million on a topline of $37.3-million the following year.
Disclosure: Siyata Mobile is an annual sponsor of Cantech Letter.