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No. of Recommendations: 1
Key Points:
· A meeting with management left us exceptionally positive about this
company's prospects for the first time in a long while. Transaction
volumes are at record levels and we expect could exceed 20 million, up
from 7 million in the year ago period.
· Revenue per transaction is rising to nearly $0.04 / transaction
(average) – noting new service introductions that capture up to $0.30
per transaction.
· Credit card transaction processing appears poised to generate the
majority of service revenues in the current quarter – for the first time
· Merchant sign-ups, up 3,000, setting records at the end of 3Q with
16,000, remain strong, adding 1,000-1,100 per month despite a seasonally
weak period!
· CYCH management is rationalizing products, services and people,
eliminating elements that no longer fit the company's strategy or market
· We expect operating cash flow positive by year-end, 2001. We fully
expect the company to rescind the shelf-filing, and to be self-sufficient
from a capital infusion perspective over the coming 3-4
· We believe CYCH shares could support a valuation of 15x revenues
suggesting a 12-month price target of $17 per share.
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