Many of you asked me to analyze Boxlight $BOXL as it seems to be undervalued. The stock gained 700% last year before crashing. Those people who are bullish on the stock seem to be bullish for the wrong reasons. My opinion on the stock changed so much throughout my analysis.
🏫 Boxlight is a 𝙋𝙧𝙤𝙫𝙞𝙙𝙚𝙧 𝙤𝙛 𝙞𝙣𝙩𝙚𝙧𝙖𝙘𝙩𝙞𝙫𝙚 𝙩𝙚𝙘𝙝𝙣𝙤𝙡𝙤𝙜𝙮, 𝙙𝙞𝙜𝙞𝙩𝙖𝙡 𝙨𝙞𝙜𝙣𝙖𝙜𝙚, 𝙨𝙤𝙛𝙩𝙬𝙖𝙧𝙚, 𝙖𝙣𝙙 𝙎𝙏𝙀𝙈 𝙨𝙤𝙡𝙪𝙩𝙞𝙤𝙣𝙨 under the brand names Clevertouch and Mimio.It makes and sells interactive education systems to schools. For example, they sell interactive displays which are set to replace blackboards. They also sell 3D printers that can help children study. There is certainly a big market for these products as schools have not changed in decades.
💸 The problem, however, with Boxlight is that the 𝙥𝙧𝙤𝙙𝙪𝙘𝙩𝙨 𝙩𝙝𝙖𝙩 𝙩𝙝𝙚𝙮 𝙢𝙖𝙠𝙚 𝙤𝙧 𝙨𝙚𝙡𝙡 𝙖𝙧𝙚 𝙚𝙭𝙥𝙚𝙣𝙨𝙞𝙫𝙚. This significantly limits their potential market. They only had $29 million in sales in the TTM. They found a way to expand their market by acquiring British company Sahara. They got a really good deal for a company which is much bigger than them and which makes cheaper products. Sahara is even profitable. This is the main reason to be bullish on Boxlight.
The proforma revenues are $105 million and Boxlight today has a market cap of $119 million. 𝙄𝙩 𝙡𝙤𝙤𝙠𝙨 𝙡𝙞𝙠𝙚 𝙖 𝙜𝙤𝙤𝙙 𝙙𝙚𝙖𝙡.
💰 However, Boxlight made a huge share dilution to acquire Sahara. Most of their debts are convertible, there's going to be more dilution in the future. Since the IPO in 2017, the market cap gained over 200% with the stock price down 50% since they issued nearly 500% in shares. 𝙏𝙝𝙚𝙮 𝙖𝙧𝙚 𝙪𝙨𝙞𝙣𝙜 𝙩𝙝𝙚𝙞𝙧 𝙨𝙝𝙖𝙧𝙚𝙨 𝙖𝙨 𝙘𝙪𝙧𝙧𝙚𝙣𝙘𝙮.
Just because a stock looks cheap doesn't mean it is. Sometimes, the market is right on the price.
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Here’s the full analysis of Boxlight:
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