Market & Company Update
New Growth via Partnerships
In the course of selling Wockets directly to consumers via the their website (wocketwallet.com) and using specialized channels it's become clear that achieving large volumes and scale will come much faster using a B2B approach. Our first example is a new development and distribution agreement with a travel-focused company called WorldVentures.1
This has major advantages for NXTD investors. The company can focus on what they do best which is technology and product development and leverage large value-added industry channels like WorldVentures for customization and distribution.
The impact on numbers is dramatic - although the company will fall well short of our 40K unit estimate for 2015 they will greatly exceed our current 120K estimate for 2016. If all goes as planned NXT-ID will "pull forward" our volume forecast by about two years. Additional partnerships like the one with WorldVenturs are targeted for other consumer-oriented markets.
The "shift" to EMV or "chip cards" has muddied the waters in the payment space and made it more difficult for early Wocket customers to enjoy a high level of acceptance. Nearly every major retailer has adopted a slightly different method of dealing with the situation - some have turned off EMV, others support both EMV and traditional swipe, others see the mess as a good excuse to go "all the way" with NFC and mobile payments.
For NXT-ID that means rolling out an NFC-based version of the Wocket which will allow consumers to enjoy broad acceptance of their Wocket card and simpler use at the point of sale. The testing and acceptance process with the major issuers takes time so we're not expecting a new version on the market until 1H2016 but we fully expect the card payment space to remain in a state of flux through that time period. Meanwhile NXT-ID will have plenty to focus on in terms of delivering against their new deal with WorldVentures.
Our IV changes are detailed below but our new IV of $6.13 suggests large reward versus the risk reflected in the current share price. If NXT-ID were a private company doing a venture round the valuation would be at least 10x the current share price.
Link to the full report: http://s3.amazonaws.com/PUBLISHED/NXT-ID_NXTD_SV_NOTE_JAN_2016.pdf
Past reports and related research can be found on our website at http://soundview.co/infosec.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
SoundView serves as a strategic advisor to NXT-ID and provides this research note for informational purposes only. SoundView does not have "ratings" and is not an investment bank, broker/dealer or registered investment advisor. We've undertaken to research all facts presented here but can make no promises that they are correct or that our reasoning and supporting intrinsic valuation model is an accurate depiction of the future. SoundView employees may have positions in stocks they work on however at the time of this writing we are not aware of any outstanding positions in the shares of NXT-ID.
About NXT- ID Inc. - Mobile Security for a Mobile World: (NXTD)
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