DPW Holdings (DPW) Stock: Climbing On Sales Update

DPW Holdings Inc (NYSEAMERICAN: DPW) is having an incredibly strong start to the trading session in the premarket this morning, and for good reason. The company reported its financial results for the full 2018 year, showing strong growth in revenue.

As you could imagine, the revenue growth led to excitement among investors, pushing the stock on a run for the top. Today, we’ll talk about:

  • The financial results;
  • what we’re seeing from DPW stock as a result; and
  • what we’ll be watching for ahead.

DPW Announces Financial Results

As mentioned above, DPW is having a strong start to the trading session this morning, after announcing its financial results for the 2018 year. The announcement came by way of press release and SEC filing.

In terms of revenue, the company generated $27,154,219 for the full 2018 year. That works out to be an increase of 16,979,719 over 2017, representing year over year growth of 166.9%.

In the announcement, DPW dais that the revenue increase was primarilly due to four acquisitions that it completed during the 2017 and 2018 years. In fact, revenue generated by these four acquired companies came in at $13,174,615.

Cryptocurrency mining revenue proved to be strong as well. The company’s Digital Farms subsidiary generated reveneue of $1,675,549 during the 2018 year.

In terms of losses, DPW said that it generated an $8.4 million loss for 2018. $8 million of this loss came from securities, primarily due to the warrants that the company received as part of its investment in Avalanche International. All in all, the company reported a net loss of $16,812,868.

In a statement, Milton “Todd” Ault, III, CEO and Chairman at DPW, had the following to offer:

We are very pleased that the Company has grown its revenue to over $27M and that our balance sheet has reached approximately $50M. We are very encouraged that revenues are up for each operating unit, including Digital Farms, posting $1.67M in sales despite the downturn in the marketplace and look forward to 2019. In 2018 we made a large investment in equipment and expanded our network in the crypto-mining space. We anticipate a boost in performance by Digital Farms due to the consolidation of its facilities in 2019.

Our investments contributed to our top line with Digital Power Corp.’s recognition of more than $3.9M in revenue from the MTIX, Ltd. contract and from our hospitality segment generating more than $3.46M in sales. We anticipate both will continue to deliver increased revenues for 2019. With the recent corporate realignment of DPW which created the new reporting subsidiaries, DPW Technologies led by JR Read and DPW Financial led by Darren Magot, we anticipate both will harness the achievements from 2018, create new efficiencies and continue the increase in sales.

2018 was a somewhat challenging year with the completion of two new acquisitions while completing the integration of two acquisitions from 2017. Further, we contended with a collapse of Bitcoin and the cryptocurrency market and the short-term debt we pursued to accomplish our goals for 2017 and 2018. We are very pleased with our progress as we strive to improve our capital structure, our cashflow and our performance in 2019.

We anticipate much of the work and investment we have made will bring discernible results starting in the second quarter of 2019 and continue through the year well into 2020. In sum, there are two important indicators that stockholders and investors should pay attention to; first, the dramatic reduction of outstanding debt and the continuing increase in sales.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to DPW, the news proved to be incredibly positive.

While losses are mounting, the larger part of losses was due to an investment, not operations. Moreover, revenue is climbing dramatically. So, it’s not surprising to see that excited investors are pushing the stock up in the market this morning.

As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:28), DPW is trading at $0.37 per share after a gain of $0.12 per share or 47.05% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on DPW. In particular, we’re interested in following the story surrounding the company’s continued work to expand revenue and bring losses down. Nonetheless, we’ll keep a close eye on the story and bring the news to you as it breaks!

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