SPGC: Sacks Parente Reports Significant Revenue Growth

Zacks Small Cap Research11-19

By Thomas Kerr, CFA NASDAQ:SPGC READ THE FULL SPGC RESEARCH REPORT On November 14, 2024, Sacks Parente (NASDAQ:SPGC) announced financial results for the 3rd quarter of 2024 which showed a significant...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSPGC: Sacks Parente Reports Significant Revenue Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-19 22:07 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/spgc-sacks-parente-reports-significant-140700292.html><strong>Zacks Small Cap Research</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>By Thomas Kerr, CFA\n NASDAQ:SPGC\nREAD THE FULL SPGC RESEARCH REPORT\nOn November 14, 2024, Sacks Parente (NASDAQ:SPGC) announced financial results for the 3rd quarter of 2024 which showed a significant...</p>\n\n<a href=\"https://finance.yahoo.com/news/spgc-sacks-parente-reports-significant-140700292.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SPGC","symbol_name":"Sacks Parente Golf, Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/spgc-sacks-parente-reports-significant-140700292.html","article_id":"2484742949","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2484742949","pubTimestamp":1732025220,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"On November 14, 2024, Sacks Parente  announced financial results for the 3rd quarter of 2024 which showed a significant increase in revenues compared to the prior year period as well as the 2nd quarter of 2024. Total revenues were $1,211,000 which increased 49.0% from $813,000 in the 2nd quarter of 2024 and over 10 times from revenue generated in the 3rd quarter of 2023.Newton shaft products increased 82.4% sequentially to $1,182,000 and Putter product revenues were only $29,000 during the quarter due to a pullback in ad spend and possible adverse effects of political election advertising. Newton shafts represented 96.7% of total revenues during the 3rd quarter. The company expects strong international growth to occur starting in the 4th quarter and into 2025.Gross margins increased to 66.5% in the 3rd quarter compared to 41.0% in the prior year period. Newton shaft gross margins are typically higher than putter products. We estimate Newton shaft gross margins are approximately 70% and","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"SPGC":"Sacks Parente Golf, Inc."},"translate_title":"SPGC：Sacks Parente报告收入显着增长","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SPGC":1},"content_text":"By Thomas Kerr, CFA\n NASDAQ:SPGC\nREAD THE FULL SPGC RESEARCH REPORT\nOn November 14, 2024, Sacks Parente (NASDAQ:SPGC) announced financial results for the 3rd quarter of 2024 which showed a significant increase in revenues compared to the prior year period as well as the 2nd quarter of 2024. Total revenues were $1,211,000 which increased 49.0% from $813,000 in the 2nd quarter of 2024 and over 10 times from revenue generated in the 3rd quarter of 2023.\nNewton shaft products increased 82.4% sequentially to $1,182,000 and Putter product revenues were only $29,000 during the quarter due to a pullback in ad spend and possible adverse effects of political election advertising. Newton shafts represented 96.7% of total revenues during the 3rd quarter. The company expects strong international growth to occur starting in the 4th quarter and into 2025.\nGross margins increased to 66.5% in the 3rd quarter compared to 41.0% in the prior year period. Newton shaft gross margins are typically higher than putter products. We estimate Newton shaft gross margins are approximately 70% and putter gross margins are closer to 50%.\nOperating loss was ($1,090,000) and the net loss was ($1,060,000), or ($0.73) per diluted share. Operating cash flow in the first nine months of 2024 was a use of cash of ($3,431,000) and capital expenditures were $463,000.\nCash and equivalents were $1,313,000 as of September 30, 2024 and the company has no outstanding debt. Working capital at the end of the 3rd quarter was $1,762,000. On August 20th, the company filed an S-3 which describes a shelf registration in which the company can raise up to $25,000,000 in proceeds through common stock, preferred stock, debt securities, warrants, rights, or units. Other potential sources of capital going forward include Reg A offerings, PIPE transactions, and At-The-Market (ATM) equity offerings.\nPublic Offering \nSubsequent to the end of the 3rd quarter in October, the company sold 366,000 shares of common stock for aggregate gross proceeds of approximately $732,000. The company intends to use the net proceeds from this offering for general corporate and working capital needs. In addition, when considering over-allotment purchases, this would essentially exhaust the maximum amount the company can currently raise under its shelf registration statement.\nBusiness Highlights\n\nThe company received a significant increase in orders from Club Champion during the 2024. Club Champion is a global golf retailer and club fitting chain with 126 locations.\n\n\nIntroduced a Weekly Driver Performance Pool program for players on the PGA TOUR Champions that use the company’s Newton Motion driver shafts in tournaments (See below for more info).\n\n\nThe company expanded the Newton Golf Shaft division with the addition of the Newton Motion Fairway Wood shaft to complement the initial Newton Motion Driver shaft. These include #3, #5, and #7 fairway woods.\n\n\nNewton Motion Shafts was named the Official Driver Shaft of the 2024 World Long Drive Championship. This event occurred August 8-11, 2024 in Atlanta, Georgia.\n\nValuation and Estimates\nOur primary valuation tool utilizes a Discounted Cash Flow process. Based on growth and profitability projections, our DCF-based valuation target is approximately $12.00 per share. Our target price may be conservative as it utilizes a high discount rate of 15.0% due to the unpredictability of earnings, higher prevailing interest rates, and the timeline of reaching net profitability on an annual basis.\nOur 2024 full year revenue estimate is $3.4 million and our 2024 EPS estimate is a loss of ($2.96). For 2025, our revenue estimate is $5.2 million and our EPS estimate is ($1.76). We expect the company to reach cash flow breakeven in 2026.\nThe company’s closest competitor Acushnet (NYSE: GOLF), trades at a price/sales ratio of approximately 1.66x. Applying that multiple to SPGC’s 2027 revenue estimate of $10.0 million and discounted back creates a stock value of approximately $9.00, which is substantially greater than the current stock price. In 2021, TaylorMade was acquired for $1.7 billion which equates to a price/sales ratio at the time of 1.7x.\nThe company’s Enterprise Value is approximately $1.7 million. With revenue expectations of $3.4 million in 2024 and over $5.0 million in 2025, the current EV appears to be irrational and more reflective of the ongoing microcap stock malaise as opposed to company fundamentals.\nSUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. \n \nDISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. 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