3SOF

QuoteWho will pay for secure email products / file transfer products?

Their main products are file sharing products, like CuteFTP. Companies are paying for it, because they can't have pirate software. 

QuoteI may be looking at it from a very simplistic viewpoint - But all private individuals are happy to use yahoo / hotmal. Most corporates use their own encryption / PKI built in into their email infrastructure.

They will have a tough time selling their products in my opinion. But let me ask you for another side - do they differentiate their product from all the other encryption software (Entrust for example) out there?
Nick

Well, revenue in 2006 was $10.9 M, and in Q2 2007 it will be $6.25 M or so. So, they're selling. And they've been selling more and more.

You could also say, "who's going to use ONT or DIVX's products?" Yet, those companies have market caps 6 and 8 times larger than GSCP.OB (and less revenues, in ONT's case).

I've used CuteFTP in the past and did not pay for it. But corporations need it and they pay.

I never heard of Entrust ... we all need to dig further on GSCP.OB, but the company is profitable, it has rising revenues and it is cheap (just $66 M market cap). Also, it has a strong balance sheet, just paid more than $4 M in debt.

The reward/risk ratio seems very attractive.

It's nice to have some disagreement, it will make me push harder and go deeper on my analysis. Thanks

Entrust is by far the biggest provider of E-mail encryption / PKI.

http://www.entrust.com/

There are a lot of other cos in the secure FTP / encryption space, so unless they offer a specific value proposition, its going to quite challenging for them.

nicknite20,

I respect your opinion but must strongly disagree with your analysis. As the CIO of a major financial institution I can tell you that I have been using their products for years. They provide a secure mechanism for corporate clients to transfer HIPAA compliant information to our company. This is not something you can simply do in house. They also have a very slick secure web product so that users do not have to download a client piece from us.  The products they sell have a price point from several hundred to thousands of dollars.

Good pick David!!!!!

Quote from: gowithahunch on June 19, 2007, 09:15:02 PM
nicknite20,

I respect your opinion but must strongly disagree with your analysis. As the CIO of a major financial institution I can tell you that I have been using their products for years. They provide a secure mechanism for corporate clients to transfer HIPAA compliant information to our company. This is not something you can simply do in house. They also have a very slick secure web product so that users do not have to download a client piece from us.  The products they sell have a price point from several hundred to thousands of dollars.

Good pick David!!!!!

Their nothing wrong with there product, just how many can they sell and grow. The only question is
will they grow after this next big quarter. The next quarters guidance is key. If they miss a step it will drop back down again. So if you are in don't get greedy and take your profits if it runs up to earnings.
If you hold to after earnings just watch the guidance, if to sell or not. I found a report on GSCP from winter 2005.


Back in 2005 CEO said 2005 would be .15 and 2006 .20  it ran up to $4.00+ then back to $2 after the one big quarter of .08. So CEO has a way of wishing.

Quote from: gowithahunch on June 19, 2007, 09:15:02 PM
nicknite20,

I respect your opinion but must strongly disagree with your analysis. As the CIO of a major financial institution I can tell you that I have been using their products for years. They provide a secure mechanism for corporate clients to transfer HIPAA compliant information to our company. This is not something you can simply do in house. They also have a very slick secure web product so that users do not have to download a client piece from us.  The products they sell have a price point from several hundred to thousands of dollars.

Good pick David!!!!!

Thanks for your testimonial gowithahunch

Yes, they say the average price of the products they sell is $20,000 now.

QuoteThe only question is will they grow after this next big quarter. The next quarters guidance is key. If they miss a step it will drop back down again.

I disagree with that view yukiii. Everybody that is studying the company knows that Q2 will be very strong but that's because of a one time order, that may or may not be repeated in the future. The CEO said: "we don't expect to get these $3 M orders every quarter, but we do expect to maintain a business relationship with the army that will eventually lead to more business for our company."

I think you're not putting the information into context. GSCP.OB is a $65 M market cap.

QuoteBack in 2005 CEO said 2005 would be .15 and 2006 .20  it ran up to $4.00+ then back to $2 after the one big quarter of .08. So CEO has a way of wishing.

I don't see any $0.08 quarter in GSCP.OB's history. In 2005 they had $0.10 EPS, in 2006 $0.13. 

The company had EPS of $0.03 in Q1 2007. This second quarter it can come in at $0.10 or more, it depends on the margin of the following order:

«SAN ANTONIO--(BUSINESS WIRE)--GlobalSCAPE (OTCBB:GSCP - News), leading the market on the integration of Managed File Transfer and Wide Area File Services technologies, today announced it has received a substantial order from the U.S. Army for Secure FTP Server, SSH Module and CuteFTP Professional software licenses, with maintenance, starting at an initial value of $2.5 million in software licenses and $300K in initial maintenance and support revenue. The fully deployed contract has maintenance and support valued at $1 million annually.»

So, I believe 2007 EPS will be at least $0.20.

As for 2008, it depends on the revenue growth, but if one believes the CEO's words, EPS can be around $0.55 (considering 5% dilution), if the company reaches $40 M in revenue with a 25% net profit margin. That would mean the stock is trading at 6.8 times forward earnings.

Maybe the CEO is more optimistic than he should, but nevertheless he has been delivering, maybe not as early as initially thought, but delivering.

My take is what this company needs now is visibility. With the stock trading around $4 now, it will probably be able to move to the AMEX sooner rather than later, and that will bring more visibility to the business and probably a much higher stock price.

I think it represents outstanding value at $65 M market cap. I'll keep holding GSCP.OB with strong hands.

last 3 years earnings

GSCP   
GSCP
GLOBALSCAPE INC OTCBB

Learn More About XBRL
    Revenue / EPS Summary *   

      
Fiscal Quarter      2007
(Fiscal Year)      2006
(Fiscal Year)      2005
(Fiscal Year)
               
               
March           
   Revenue   $3,623(t)   $2,414(t)   $1,422(t)
   EPS   0.03 (3/31/2007)   0.03 (3/31/2006)   0.01 (3/31/2005)
   Dividends   N/A   N/A   N/A

June           
   Revenue       $2,445(t)   $1,819(t)
   EPS       0.04 (6/30/2006)   0.04 (6/30/2005)
   Dividends       N/A   N/A

September           
   Revenue       $2,603(t)   $1,723(t)
   EPS       0.03 (9/30/2006)   -0.04 (9/30/2005)
   Dividends       N/A   N/A

December  (FYE)           
   Revenue       $3,510(t)   $1,713(t)
   EPS       0.02 (12/31/2006)   0.08 (12/31/2005)
   Dividends       N/A   N/A


Totals           
   Revenue   $3,623(t)   $10,973(t)   $6,678(t)
   EPS   0.03   0.12   0.09
   Dividends   N/A   N/A   N/A
       

Your table is weird yukiii, I'm sorry but I don't understand it very well. Why don't you share a link instead? Thanks.

I think I've covered the essential of the fundamentals of GSCP.OB. What I would like to do next is to study the risks to my forecasts. Yes, let's do that, probably it's a good practice, not just for this pick, but for all others, present and future.

Unfortunately today I had personal issues to take care and got to this update quite late in the day. So I'll do it over the next updates.

Technically GSCP.OB continues to consolidate recent gains. I believe another powerful leg up can happen anytime, because the stock is just too cheap here and 2nd quarter results will be outstanding! (not many people interested in selling before the big EPS news).

Quote from: David Randolph on June 21, 2007, 08:28:28 AM
Your table is weird yukiii, I'm sorry but I don't understand it very well. Why don't you share a link instead? Thanks.

I think I've covered the essential of the fundamentals of GSCP.OB. What I would like to do next is to study the risks to my forecasts. Yes, let's do that, probably it's a good practice, not just for this pick, but for all others, present and future.

Unfortunately today I had personal issues to take care and got to this update quite late in the day. So I'll do it over the next updates.

Technically GSCP.OB continues to consolidate recent gains. I believe another powerful leg up can happen anytime, because the stock is just too cheap here and 2nd quarter results will be outstanding! (not many people interested in selling before the big EPS news).

http://www.nasdaq.com/aspx/RevenueEPSSummary.aspx?&symbol=gscp&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&selected=gscp

Thanks yukiii.

I really enjoy GSCP's products:



Also, the way they paid their debts early shows a lot of confidence in the future:

«During the three months ended March 31, 2007, the Company generated $1.1 million of cash from operations, which was used along with other funds in the early payoff of the term loan from the Availl acquisition.  We continue to generate cash in excess of our operational needs.

The Company entered into a loan agreement with Silicon Valley Bank on September 22, 2006 which involved a $5,000,000 term loan agreement which we used to finance part of the cash portion of the purchase price for Availl. The term loan has been fully repaid as of March 31, 2007.»

In six months they paid the loan.

I'll keep holding GSCP.OB.

I got in yestreday at 3.80 half of my position and looking forward to buy the other half anytime soon if it reaches my price

whats your price

GSCP's website (www.globalscape.com) is very well prepared for international sales, because it automatically sees that I'm Portuguese and presents all content in Portuguese language (just a problem with this, I can't copy/paste information to post here ).

Not considering the future potential, GSCP's historical revenue growth rate is 50% a year and its industry average revenue growth is just 23%. Yet, GSCP.OB trades at 25 times forward earnings and its industry trades at 44 times earnings.

GSCP.OB should jump to $6 plus immediately, just based on its past fundamental trends and comparisons with its industry peers.

But the future looks even better in my opinion. I see 5% dilution a year, 75% revenue CAGR, 25% net profit margin and a 35 times earnings multiple, and that means a $26.24 stock three years from now.

Yet, the future can happen sooner rather than later, especially if we start getting more mammoth orders from the US army, like the following:

• GlobalSCAPE Expands its Relationship with the U.S. Army through Additional Order for Secure Server and SSH Module Licenses
Business Wire (Thu, May 3)

I'll keep holding GSCP.OB.

GlobalScape is probably my single best idea right now. I'll keep holding the stock, expecting it to make a bullish breakout.

GSCP.OB continues to consolidate in the $3.7 - $3.95 area. Two catalysts may push it higher anytime soon:

• GlobalSCAPE Announces $3,000,000 Stock Buyback
Business Wire (Tue, May 22)

The company makes it happen by buying back shares causing a bullish breakout of the current congestion area.

Or else ...

"I am disappointed that we have not added the large order discussed earlier, or the AMEX listing yet, but we believe both continue in process by the relevant parties. I must also add that nothing is assured until you have it in hand," he noted.

They already delivered the large US Army order. AMEX is next?

I guess that with the share price comfortably above $3 everything is set for an AMEX listing.

Anyway, even if these two catalysts don't happen, valuation is still quite supportive and the stock will eventually breakout to new highs, in my view.

GSCP.OB is still going through this consolidation period. But it has been holding fairly well, near the highs. Any day now we can get a beautiful white marubozu to new highs, since we know there are good news ahead, either the AMEX listing or the 2nd quarter results.

I'll keep holding GSCP.OB.