xG Technology Inc (NASDAQ:XGTI)

xG Technology Inc (NASDAQ:XGTI) Records Record Revenues – Again

xG Technology Inc (NASDAQ:XGTI)

xG Technology Inc (NASDAQ:XGTI) shares are up almost 20% on the news that it expects to report record revenue for the second quarter 2017 in the range of $14.1 million and $14.5 million. Since closing the Vislink acquisition in Q1 2017, xG Technology has recorded record revenues for two successive quarters.

xG Technology Inc (NASDAQ:XGTI)
daily bar graph for $XGTI

Roger Branton, CFO and co-founder of xG Technology, said, “xG expects to end second quarter 2017 with approximately $4.6 million in cash, and continues to work on reducing non-essential costs towards our goal of being cash flow positive for the year. We anticipate that we will report positive EBITDA (earnings before interest, taxes, depreciation and amortization) and net income for the second quarter 2017.”

Record revenues will be very welcome by xG Technology Inc (NASDAQ:XGTI) shareholders. XGTI has lost over 83% or the year, but is up 16.3% YTD. Adjusted for dilution effects, XGTI briefly traded over $100 during 2015.

xG Technology’s portfolio of brands includes Integrated Microwave Technologies (IMT), Vislink, and xMax. Together they provide wireless video solutions to broadcast, law enforcement, and defense markets. Additionally, they cater to private mobile broadband networks for use in challenging environments.

Earlier this month, xG Technology Inc (NASDAQ:XGTI) announced that its Vislink business has received an order with an approximate value of $300,000 from a leading sports broadcast organization in the Middle East region for wireless video systems. IMT reportedly is a pioneer in advanced digital microwave systems and is a trusted supplier to broadcast, sports and entertainment, and MAG (Military, Aerospace & Government) markets.

Only one investment analyst follows xG Technology Inc (NASDAQ:XGTI). They rate the shares as a “Strong Buy” with a price target of $3.50.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

xG Technology Inc (NASDAQ:XGTI) Guns off of Q1 Results

xG Technology Inc (NASDAQ:XGTI)

There can be no doubt that one of today’s most pressing concerns for corporations and governments is communications integrity. Information is needed quickly, completely, and securely. Enter xG Technology Inc (NASDAQ:XGTI). xG Technology develops and sells software that helps ensure video is transmitted as fast as possible on secure networks. They supply broadcast networks, militaries, and corporations. This is no service that has to prove its demand. Every day the media reports about hackers stealing vital data or even feature movies. Today, xG Technology Inc (NASDAQ:XGTI) released their financials – and the market responded in a big way.

xG Technology Inc (NASDAQ:XGTI) ended Monday’s trading at $1.45. XGTI gapped up to open $1.82 then hit a high of $2.14 before settling around the $2 handle. Bad news for the 13% of the float that was held by short-sellers. Volumes have confirmed the up move – XGTI has a 30-day, daily average volume of 453,500 but over 23 million shares traded hands today. Hopefully some of that was the shorts exiting while licking their wounds. The stock is still trading well below its 52-week high of $4.98 but is well, well off its 52-week lows of $0.25.

xG Technology Inc (NASDAQ:XGTI) is a nano-cap company with only a market-cap of less than $20 million but it had sales of over $6.6 million last year. Today it reported Q1 2017 revenues of $9.3 million – more than all of last year. But they also reported a wider operating loss of (-$5.7) million when last year’s Q1 figure was a loss of only (-$4.6) million. But, and here is where the rubber hits the road, net income attributable to shareholders came in at $8.3 million or $0.087 per share of XGTI. That is quite a turnaround from Q1 2016 when the company reported a net loss of (-$4.4) million or (-$21.42) per share.

Part of the impact on their financials was finalizing the acquisition of Vislink. That deal was done without the need for taking on any additional debt – when was the last time you read about a small firm doing that? That acquisition has contributed to xG Technology’s strategic plan to be a key provider of comprehensive video, broadband and satellite solutions to the broadcast, sports and entertainment, and defense markets. Interestingly, once the Vislink acquisition was complete, their revenues were running at $1 million per week. Most companies can do quite well with that level of revenue. On top of that, they made a move to become leaner by eliminating $3.8 million from their payrolls.

So, at the end of the day, xG Technology Inc (NASDAQ:XGTI) is operating in a hot market that likely will continue expanding as bad guys get more sophisticated. Add onto that the management’s ability to turn their revenues into shareholder value. Those two noteworthy items would check off a lot of boxes for most investors. However, don’t forget that this is a volatile industry that relies on a lot of intellectual property. What is hot today can be eclipsed by a better idea in the future. MySpace comes to mind…

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.