January 25, 2022

Why This Tech Stock is Wildly Undervalued | NuRAN Wireless $NUR $NRRWF

Midas Letter
Midas Letter
Why This Tech Stock is Wildly Undervalued | NuRAN Wireless $NUR $NRRWF
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NuRAN Wireless Inc (CNSX: NUR, OTCMKTS: NRRWF) recently announced the company reached a major commercial milestone. The milestone comes after generating its initial network-as-a-service (NaaS) revenues. The numbers are looking much larger than the company’s forecasts and estimates. This news suggests that NuRAN is wildly undervalued compared with its telecom peers.

Today, NuRAN has close to 2,500 sites under contract with Orange (NYSE:ORAN) and MTN Group (JSE:MTN) in the DRC, Cameroon, and South Sudan. That number is the minimum amount of site builds NuRAN will build with the largest telecom companies in Africa. There is also the potential for further site buildouts down the line. For example, NuRAN sees the potential to build over 10,000 towers across the DRC.

“We have 2,492 as a minimum under contract but we can probably scale” – NuRAN Wireless CEO Francis Létourneau

The milestone mentioned follows an update from the first live sites in Cameroon. NuRAN’s sites reached an average penetration rate of 45.9% (the number of connections to a service divided by the population) – more than double NuRAN’s initial projections. These live statistics have increased the average revenue generated from these sites by over 90% to $2,335 per site.

“The $5.8 million shown in the press release is $2,300, which is the result we are getting from the sites, times 2,500 sites leads to $5.8 million per month, multiply by 12 its close to $69 million per year for only the sites we have live under contract today” – NuRAN Wireless CEO Francis Létourneau

With the initial assumption of operating 10,000 sites in the next five years, revenues were expected to be $250 million annually with a 50% EBITDA, equating to $125 million. But again, those numbers are conservative, even pessimistic, compared with the revenue generation of NuRAN’s current sites.

Looking at comparable tower companies that usually trade at 10x EBITDA, NuRAN’s estimates and now tangible numbers make the company’s valuation look even cheaper than initially realized.

Transcript

00:00 – NuRAN Wireless CEO Francis Letourneau
00:40 – Current revenues
02:51 – Conservative forecasts & models
04:28 – How long to build 10,000 towers?
05:08 – Revenue from 10,000 towers
05:34 – $NUR undervalued?
06:27 – 5000 sites
08:45 – NuRAN due diligence & achievements

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