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IQST Stock: An Undervalued Opportunity

IQST Stock: An Undervalued Opportunity
Written by
Alex Carlson
Published on
October 28, 2020
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IQST stock has a history of making big moves. The last time we covered the stock was back in February after IQST stock delivered 750% gains. Since then, the stock settled lower and hasn't done much until now. IQST StockIQST stock is running after Goldman Small Cap Research issued a research report with a $.54 a share price target. In this article, we take a look at the Goldman Small Cap Research report and determine if the price target is realistic. But first, here's a little background info for those not familiar with IQST stock.

IQST Stock

iQSTEL is a US-based publicly listed company offering leading-edge 21st Century Enhanced Telecommunications Services with a focus on a wide range of cloud-based enhanced services to the Tier-1 and Tier-2 carriers, corporate, enterprise, as well as the retail market.iQSTEL through its subsidiaries Etelix, SwissLink, QGlobal SMS, SMSDirectos, IoT Labs, IoT Smart Gas Platform, itsBchain offers a "one-stop-shopping" for international and domestic VoIP services, IP-PBX services, SMS exchange for A2P and P2P, OmniChannel Marketing, Internet of Things (IoT) applications (IoT Smart Gas Platform), 4G & 5G international infrastructure connectivity, as well as blockchain-based platforms: Mobile Number Portability Application (MNPA) and Settlement & Payments Marketplace for VoIP, SMS, and Data.[embed]https://www.youtube.com/watch?v=5qlL1w6KMY4&feature=emb_title[/embed]

Goldman Small Cap Research

IQST stock issued a PR on the Goldman Small Cap Research Report. The company said:

iQSTEL, Inc. (USOTC: IQST) today announced an Analyst Research Report from Goldman Small Cap Research with a $0.54 Price Per Share (PPS), nearly 10x yesterday's closing at $0.067 PPS. Goldman's report highlighted IQST's strategic differentiators in the Telecommunications and FinTech sectors with revenue on track to reach $42 million by year end 2020 and expected to exceed $80 million by 2020. IQST is a fully reporting company with audited financials. With only 78.2 million shares outstanding, Goldman's $0.54 PPS target reflects only 1x 2020E sales and 0.7x 2021E revenue – "upside to our targets and metrics are in the cards," reports Goldman.

The first thing investors need to understand that this is not Goldman Small Cap Research is not affiliated in any way with Goldman Sachs. Second, this research report was paid for by the company. In the disclaimer it says:

Goldman Small Cap Research was compensated by the Company in the amount of $3500 for a research report production and distribution, including a press release.

Now, this doesn't mean the report is erroneous, but it is biased. It also means that the company is trying to create awareness and boost shareholder value. That is a good thing in our opinion.

IQST Stock Tremendously Undervalued

The reason the company hired Goldman Small Cap Research is that IQST stock is greatly undervalued. The company has a current market cap of just $7.8 million, yet reported $18 million in revenues last year. In the last quarter ending June 30th, IQST stock did over $11 million in revenues and posted $1.2 million in net income.

Conversions Halted

For those new to penny stocks, the most important concern is dilution. Toxic debt allowing convertible noteholders to convert debt into endless shares that are sold into the market kill most OTC stocks. With IQST stock, management is working for its shareholders by halting all conversions.In August, IQST stock reached an agreement with the last matured noteholder, thereby succeeding in halting all further conversions. This followed a previous deal with BHP Capital NY Inc and Jefferson Street Capital LLC that both agreed to exchange at a premium to the current market, $0.11/sh, settling the debts in full.Originally the debt included a 50% discount to market conversion rate, interest, and other provisions. By settling at $0.11/share, iQSTEL and shareholders not only benefit from the debt reduction but this premium to market shows serious confidence in the ability of iQSTEL management to continue executing on their business plan. Any remaining share reserves will be canceled with the transfer agent.

Fintech Expansion

IQST stock just entered into an agreement with Payment Virtual Mobile Solutions LLC (PayVMS) to build a VISA Prepaid Debit Card service to enable iQSTEL clients to make purchases in stores and online, do cash withdrawals at ATMs or get cash-back when making a purchase, recharge prepaid mobile phone service (domestic and international), send money domestically or internationally, deposit funds into bank accounts, rewards, and Digital Gift Cards, Bill Payments and Remote Deposit Capture (RDC) by mobile phone.The fintech division will provide financial service alternatives to the common PayPal and Venmo type applications not readily available to the world's growing 272 million population. Below are some of the targeted Fintech products and services designed specifically for the global immigrant population:

  • Send money domestically and internationally with low fees.
  • Send money via SMS using a customized SMS service (smartphone not required).
  • Pay utility bills with minimal payment fees (mobile, electricity, gas services).
  • VISA debit card solution.

IQST Stock Bottom Line

Trading with a current market cap of just $7.8 million, IQST stock is incredibly cheap at these levels. With the recent price jump, it will bring in more investors and after reading our report (we weren't paid) and the one written by Goldman Small Cap Research, investors will have confidence that IQST stock won't remain this cheap for long, especially if the company up lists to NASDAQ or NYSE. We expect this undervaluation to correct itself as we head into 2021.As always, good luck to all (except the shorts)!


Disclosure: We have no position in OTCMKTS:IQST or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.Image by Nattanan Kanchanaprat from Pixabay

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