Intellicheck Inc Up 172% Since April, Strong Metrics Suggest More to Come

Intellicheck Inc Up 172% Since April, Metrics Suggest More to ComeIntellicheck Stock Rockets on Massive Revenue Growth

An increasing number of devices offer the more secure option of biometric and facial recognition entry. We see this in laptops, tablets, and smartphones. Intellicheck Inc (NYSE:IDN) is a growing player in this high-growth segment, developing identity technologies.

IDN stock fell as low as $1.91 in April after trading at over $10.00 in February prior to the broader market selling.

Intellicheck stock has rallied by a staggering 172% over the past three months and by 30% during the past year. In my view, this tech stock continues to provide a strong risk/reward opportunity for aggressive traders.

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Chart courtesy of StockCharts.com

What excites me about Intellicheck is its strategy to introduce new products and enter new markets, including the online space.

Massive Revenue Expectations Support Bull Case for IDN stock

Intellicheck Inc’s revenue base is small, but the 72.9% growth in 2019, along with the expected forward growth, gives me confidence.

Fiscal Year Revenues (Millions) Growth
2015 $7.0
2016 $3.8 -45.3%
2017 $3.6 -6.3%
2018 $4.4 23.2%
2019 $7.7 72.9%

(Source: “Intellicheck Inc.,” MarketWatch, last accessed July 3, 2020.)

IDN is estimated to ramp up its revenues by 55.4% to $11.9 million in 2020, followed by an increase of 57.7% to $18.8 million in 2021. (Source: “Intellicheck, Inc. (IDN),” Yahoo! Finance, last accessed July 3, 2020.)

The company has yet to turn profits on either a generally accepted accounting principles (GAAP) or adjusted basis, but its GAAP loss has narrowed in the past three years.

Fiscal Year GAAP Diluted Earnings Per Share Growth
2015 -$0.55
2016 -$0.58 -5.5%
2017 -$0.48 17.2%
2018 -$0.26 46.9%
2019 -$0.16 36.7%

(Source: MarketWatch, op. cit.)

This year, Intellicheck Inc could report profits on an adjusted basis. The uncertainty is the impact of COVID-19 on earnings growth.

In 2020, the company could break even in terms of EPS. For 2021, there’s a consensus estimate of adjusted profits of $0.32 per share and a high estimate of $0.45 per diluted share. (Source: Yahoo! Finance, op. cit.)

Intellicheck has yet to deliver positive free cash flow (FCF), but this is not unusual for a company of this smaller scale. The positive news is that Intellicheck’s FCF was at a five-year high in 2019 and that it could turn positive either this year or in 2021.

Fiscal Year Revenues (Millions) Growth
2015 -$4.6
2016 -$4.3 5.7%
2017 -$3.8 12.1%
2018 -$4.4 -15.3%
2019 -$1.9 57.3%

(Source: MarketWatch, op. cit.)

Analyst Take

The outlook for Intellicheck Inc looks promising if the company can deliver. 2021 looks like it will be a crucial year as the company ramps up its profits.

Using the high estimate for 2021, Intellicheck stock currently trades at a reasonable 16.4 times EPS. The stock could jump 50% and still not look overvalued for a small technology growth stock.

Insiders appear to be taking the opportunity to accumulate IDN stock at the lower prices. Over the last six months, insiders have added 130,957 shares and have sold no shares. (Source: Yahoo! Finance, op. cit.)