Should You Buy TSR, Inc. (TSRI) Stock On Record Revenues?

TSR, Inc. (NASDAQ: TSRI) TSR is screaming for the top in the market this morning after announcing that it produced record revenues in the second quarter. At the same time, the ultra-tiny float on the stock is helping exacerbate the returns. Here’s what’s going on:

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TSRI Announces Record Revenues

As mentioned above, TSR is flying in the market this morning after announcing that it produced record revenue. The information technology consulting and recruiting company said that it generated $23.9 million in revenue during its second fiscal quarter of 2021, ending November 30, 2021. That figure represents year over year growth of 48.5%. In the same quarter of 2020, the company generated $16.1 million. 

The company also found its way to profits. 

In the press release, TSRI said that net income came in at $243,000, or $0.12 per share. In the same quarter last year, the company produced a loss of $247,000, or $0.13 per share. 

The company went on to explain that it ended the quarter on a strong note financially. At the moment, it has about $6.3 million in cash on its balance sheet and less than $50,000 to show for in debt. All told, net cash is in excess of $6.2 million, working out to about $3 per share. 

Management Commentary

In a statement, Thomas Salerno, CEO at TSRI, had the following to offer:

“The demand for staffing services remained robust in the quarter. Our revenue increased 48.5% for the second quarter due to organic growth from new and existing customers. Operating income for the current quarter was $415,000 as compared to an operating loss of $223,000 in the prior year quarter. If our current trends continue, we expect operating income to continue to grow as we leverage selling, general and administrative expenses.

TSR’s operational team as well as the hundreds of high-quality consultants working with our clients are all doing a fantastic job. We spent the first part of the 2021 calendar year building the team and modernizing several of our back office systems and we are now seeing some of the benefits of those investments with both sequential growth in revenues and solid operating income. We believe our strong balance sheet and largely untapped credit facility provide us the ability to further accelerate revenue and earnings growth through acquisitions.”

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Low Float Helps Gains

It’s also worth mentioning that TSRI has one of the lowest floats I’ve ever seen, with just 1.09 million shares available to the public. As the strong results continue to hit the tape, the fact that there’s a low float in play could send the stock to the moon. 

After all, prices in the stock market are dictated by supply and demand and the low float points to the fact that there’s not much supply. 

So, should demand take a mainstream style run, the price of the stock could climb far further than what it’s seen thus far in the premarket. 

The Bottom Line

The bottom line here is that TSRI is firing on all cylinders and has produced an incredible second quarter report as a result. With record revenues and profitability hitting the tape, investors are excited; and with the tiny float, the sky’s the limit. 

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