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DATA443 RISK MITIGATION, INC.

ATDS Stock Worth Nearly 3x Current Price--Today

Rob Goldman
[email protected]

November 26, 2019
 

DATA443 RISK MITIGATION, INC. (OTC – ATDS - $0.5374)

Price Target: $3.65 Rating: Speculative Buy
   

COMPANY SNAPSHOT

INVESTMENT HIGHLIGHTS

Formed in 2017, Data443 Risk Mitigation, Inc.  provides cyber-data security protection, software and services. Growing privacy legislation such as the CCPA and GDPR are increasing the demand for capabilities delivered by The Company. The Company provides solutions that are designed to protect data via the cloud for sensitive data of all types.  The Company's suite of products allowing its clients to create, share, and protect their data wherever it is stored. Its solutions are delivered by proprietary technologies and methodologies that it has developed and acquired, empowering its primary competitive advantage.

 

KEY STATISTICS

 
Price as of 11/25/19 $0.5374  
52 Wk High - Low $4.425 - $0.030  
Est. Shares Outstanding 11.7M  
Market Capitalization $6.3M  
Average Volume 16,957  
Exchange: OTCPK  
 

COMPANY INFORMATION

Data443 Risk Mitigation, Inc.
101 J Morris Commons Lane
Suite 105
Morrisville NC 27560
Web:     www.Data443.com
Email:   [email protected]
Phone : 919.858.6542


 

The Bottom Line: ATDS is enjoying impressive revenue growth and an enviable financial performance. This overlooked, pure play data security company is tremendously undervalued relative to its peers, and we believe that the spread will narrow in the coming months.

ATDS Is Too Cheap: Cybersecurity is one of the most critical, high-profile industry segments and these companies are thus awarded technology’s highest valuations. Yet, the current ATDS Price/Sales multiple on 2019 forecasts is a paltry 3.5x versus 8.6x for the publicly traded peer group, including Varonis and Sailpoint. Using the same multiple, our split-adjusted $3.65 price target reflects an increase of 6.5x current stock price levels.

Huge Growth Across the Board: As evidenced by 3Q19 results, ATDS enjoyed huge growth. Revenue literally rose from zero to $628,000 in one year, and with net billings of $1.1M and deferred revenue of $927,000, the future is bright. Plus, ATDS is nearly cash-flow positive, reflecting its $5M reduction in debt (35% of debt) from the year ago period.

Major Milestones: ATDS has already achieved major milestones in 4Q19. These include a 1 for 750 stock consolidation along with a name and symbol change to better reflect the Company’s operations. This re-branding serves to aid ATDS’ corporate marketing efforts. Separately, ATDS’ shares outstanding has decreased by 15% due to the recent litigation settlement which also eliminates a potential stock sale overhang.

The Road to $3.65: We estimate revenue will reach $1.8M in 2019 and could approach $5M in 2020---without additional M&A---which we believe will occur sometime in 1H20. Based on these forecasts, ATDS is worth $1.32 today (8.6x our 2019 forecast) and $3.65 next year.  Once additional M&A is executed next year, this target will likely have to be revised upward.

Senior Analyst: Robert Goldman

Rob Goldman founded Goldman Small Cap Research in 2009 and has over 25 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification

I, Robert Goldman, hereby certify that the view expressed in this research report or article, accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

Disclaimer

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