GEO Investing

There was a good amount of optimism within the company’s 2021 10-K and 2021 Q1 communications about the prospects of a post-pandemic normalization, which led to our favorable take on the valuation on what we thought was a reasonably valued stock with some upside if certain things played out:

“VIDE is trading at 0.7x TTM price to sales multiple which we believe is not that unreasonable if the company can reach consistent profitability, considering the positive growth outlook management has communicated for the remainder of its 2021 fiscal year. We also like management’s shift to focus on cyber security which could also be a reason to assume that shares could eventually trade at a price to sales multiple well in excess of 4x.”

Long term price appreciation never materialized, but to be fair, as seen below, the company’s fiscal 2021 results did actually come in at an aggregate year over year increase, sending the stock to a brief high of $3.10. You could say, if just for a short moment, that the results supported the company’s outlook. However, investor conviction in the stock waned almost immediately, with the price settling back to its pre-financials levels.