05-07-2019, 07:39 AM
While our comfort level decreased, a month or so ago, our concerns have considerably lessened. They're not entirely gone, but the company has such an overkill of backlog that most of it has to be dud for the company not to meet its revenue guidance this year.
That possibility seems much less now that the famous $50M backlog PR containing customer names looks not dodgy, contrary to what the Oil & Gas Bulletin trader argued. As it turns out (and we should have checked that, mea culpa) ACN Europe alone could very well be responsible for that $50M backlog, despite the fact that the other companies named in that PR don't look capable of generating anywhere near multi-million dollar revenue (hence they seemed dodgy).
So that PR looks solid and hence we think it's much less likely the company will run out of backlog anytime soon.
There could very well be dodgy backlog, but we think it isn't likely this is such a serious problems as to affect revenue growth anytime soon, especially given the fact that backlog itself keeps growing, and in Q4 existing customers more than doubled their orders.
So our comfort level, while not at 100% (it rarely is) has increased again (for a larger explanation, see here).
That possibility seems much less now that the famous $50M backlog PR containing customer names looks not dodgy, contrary to what the Oil & Gas Bulletin trader argued. As it turns out (and we should have checked that, mea culpa) ACN Europe alone could very well be responsible for that $50M backlog, despite the fact that the other companies named in that PR don't look capable of generating anywhere near multi-million dollar revenue (hence they seemed dodgy).
So that PR looks solid and hence we think it's much less likely the company will run out of backlog anytime soon.
There could very well be dodgy backlog, but we think it isn't likely this is such a serious problems as to affect revenue growth anytime soon, especially given the fact that backlog itself keeps growing, and in Q4 existing customers more than doubled their orders.
So our comfort level, while not at 100% (it rarely is) has increased again (for a larger explanation, see here).