TOP IDEAS: AirIQ Inc.’s (TSXV: IQ) growing recurring
revenue streams and cash generation put the Company in a stronger position to
acquire or be acquired.
It was about two years
ago when Investorfile was bullish on the future of AirIQ's fiscal 2020
financial results (See: AirIQ is set
to deliver strong growth for the upcoming fiscal 2020 results). Back
then, the Company delivered. For fiscal 2021, AirIQ’s growth was subdued,
mostly due to the impact of the COVID-19 pandemic. But, to date, in fiscal
2022, there are already signs of good growth occurring again. This growth could
be rewarding for investors in one way or another.
Inc. (TSXV: IQ – C$0.31) operates in the growing telematics industry and, for
25 years, the Company has been providing Global Positioning Service (GPS)
solutions to customers throughout North America.
AirIQ's solutions allow commercial businesses to
reliably, effectively and efficiently monitor assets in near-real time. The
Company develops iOS and Android mobile and web-based applications, As well as
cloud-based solutions that stand alone or that can be readily integrated with
existing software. AirIQ solutions are mixed fleet-capable and provide fleet
reporting, maintenance, compliance, safety and analytics, utilizing multiple
hardware options, including a fully integrated video telematics camera solution
and a battery-powered solution for non-powered assets.
Our optimism for 2022 is partially based on AirIQ’s most
recent financial report. Just recently, the Company reported its 2022 fiscal Q2
results. Monthly recurring revenues are hitting new record highs which total C$860,000 and make up 73% of the C$1.2 million revenues for the quarter. During the
quarter, the Company earned EBITDA margins at a rate of 22% of revenues.
AirIQ’s Management said they are operating towards achieving the coveted "rule
of 40” metric for optimal financial performance of growth companies (this
implies the summation of recurring revenue growth and EBITDA margins). The
Company already scores high at 31 with the summation of both metrics this
When AirIQ wins orders for its suite of asset management solutions, it has
two distinct revenue components. The hardware component is revenue which is
earned on delivery, while the GPS and video surveillance monitoring is
highly encouraged with results to date for fiscal 2022 at AirIQ and believe the
recent growth momentum will continue throughout this year and next. The
Company’s customer base, which is largely in the construction equipment and
commercial fleet sectors, is showing robust business activity and, therefore,
has the propensity to invest in asset management solutions.
the Company’s cash flow generation is strong: C$700,000 from operations in Q2.
As of September 30, 2021, AirIQ had about C$2.3 million in cash on its balance
sheet, with no debt.
financial position, Investorfile believes (post-COVID) that the Company will be
active with some M&A activity. Otherwise, given AirIQ’s industry, growing
recurring revenue streams, EBITDA margins and hefty tax-loss credits, the
Company could also be subject to a buyout by being an attractive target. We
feel one or the other could occur in 2022, which would reward shareholders who
hold the stock.
AirIQ’s stock price is up 290% in value since Investorfile
first recommended the Company as one of its Top Ideas (See: AirIQ is a
technology company small in size but the stock is big in value).
approximately 29.8 million shares outstanding.
The Company's website: www.airiq.com
Author's share ownership disclosure: IQ –
share price accumulation target of $0.20 for AirIQ Inc. was initially reached
on July 5th, 2019.
article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.
is not engaged in an investor relations agreement with AirIQ Inc. nor has it received any compensation from AirIQ Inc. the preparation or distribution of this article.
author of this article has acquired and may trade shares of AirIQ Inc. through open market transactions and for investment purposes