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ShiftPixy Shows Impressive Growth, Stock Remains Undervalued

Apr. 20, 2018 1:08 PM ETShiftPixy, Inc. (PIXY)30 Comments
Steven Highfill profile picture
Steven Highfill


  • Gross billings increased 58% and continued to accelerate quarter-over-quarter by more than 20%.
  • Revenue increased 45% and continues to grow sequentially.
  • Expanding client base and steady increase in the number of on-site gig/shift workers.
  • Company launches an innovative Driver Management Solution enabling fast-food clients to use their team members to self-deliver under its brand instead of having to rely on expensive third-party services such as GrubHub.
  • A key differentiator is a unique on-demand Uber-like mobile app connecting gig/shift workers to gig/shift openings in real time.

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On April 13, 2018, ShiftPixy (NASDAQ:PIXY), providers of an on-demand human capital management platform connecting employers to part-time shift or "gig” workers, reported fiscal 2018 second quarter results. Gross billings grew 58.1% to $48.6 million, compared to $30.8 million for the 2017 second quarter. Gross billings increased 20.9% sequentially from $40.2 million in the prior quarter. Revenues increased 45.8% to $7.9 million, compared to $5.4 million for the second quarter of 2017. Worksite employees rose by 3,405 to 6,798 compared to 3,393 as of February 28, 2017. The number of employees at the end of the quarter also represents a sequential increase of 1,116 over the number of employees at the end of first fiscal quarter 2018. Gross profit was $0.9 million vs. $1.1 million in the prior year period, and net loss per share was 9 cents during the quarter, vs. a net loss of 4 cents the previous year period. The company beat estimates by a penny per share. This report solidifies a continuing trend of impressive growth for the young Nasdaq-traded company.

During the follow-up conference call, the CFO provided an update for the current fiscal third quarter. During the first half of the quarter, the company added 16 new clients and approximately 1,300 new on-site workers since the end of the fiscal second quarter ending February 28, 2018. He said these wins could add $93 million in new gross billings. The CFO also confirmed the company's goal to reach a breakeven point on cash flow by the end of 2018. The CFO continued: “The sequential month-over-month growth

This article was written by

Steven Highfill profile picture
Mr. Highfill is a former Regional Investment Banker and Research Analyst with Blackstock & Company, a Private Equity Investor, and currently, Founder and CEO of XaaS Capital and XaaS Acquisitions, Inc. XaaS Capital, Inc. (“XaaS”) is a privately held company focused on identifying public market venture capital opportunities that can benefit from our expertise in closing alternative public offerings. XaaS Acquisitions, Inc. is a Special Purpose Acquisition Company ("SPAC") or blank check company newly incorporated as a Delaware C-Corporation for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or assets. Although we have not selected any business combination candidates, we have initiated substantive discussions with several business combination targets in the Telecommunications, Cloud Communications, and Connectivity sectors. We are focusing our search for businesses in these rapidly growing and sustainable arenas as demand for voice, messaging, data, content, connectivity, and communications explode and networks converge.  Specific sub-sectors we are targeting include Unified Communications-as-a-Service ("UCaaS"), Communications Platform-as-a-Service ("CPaaS"), and Network-as-a-Service ("NaaS"). Mr. Highfill has expert-level experience in corporate and partnership structuring; capital formation; M&A; Law Firm Mergers; Retained Executive Search; Human Resources Development and Allocation; Internet Technologies; Software Development; Internet Technologies; Deep Web Search, Extraction and Data Aggregation; Vertical Search Engines; Legal Directories; Artificial Intelligence; Conversational AI, Machine Learning, UCaaS, Mobile App Development, Legal Marketing & Business Development; Digitial Marketing; Blockchain Technology; Cryptocurrencies; Investment Banking; Private Equity; Real Estate Investments and Transactions; CRE Project Development; Resort Development; Sales; Marketing; Staffing and Litigation support for Foreclosure and Consumer Law, Mortgage Securitizations, Title Litigation; Complex Commercial Litigation, and Contract Law.

Analyst’s Disclosure: I am/we are long PIXY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I may increase my position in the next 72 hours. I have no relationship with the company or any company that has a relationship with ShiftPixy.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (30)

Little, Einstein profile picture
Former banker.
That says it all, do you know any honest former bankers?
This author was deliberately dishonest. One of his comments stated that he recommended this as an investment, while in the comment stream on his other recommendation, the author suggested he sold this on short term strength and made a profit.
I should clarify, if you check the comment section on SEEL, this author stated he took a profit on PIXY and did NOT hold it long term.
Patrick Irish profile picture
From this article, "I believe PIXY stock is undervalued at current prices and should be accumulated by investors seeking attractive returns over the next 3-8 months."

I would call anything under 1 year a swing trade. But whether you or he calls his position an investment or trade, he flat out said this was for 3-8 months which is very short term.

On top of that, these articles are free. Authors have no obligation to hold for long periods of time. Even if they call something a long term investment, any new filing from a company can change their mind.
Patrick Irish profile picture
Down 85% since publication, not a great opening article for this author. As small cap reporter mentioned, this management team seems like a joke.
Small Cap Reporter profile picture
took the words out of my mouth. That and the fact it's been promoted in the past by newsletters tells me there's likely some bias here.
Small Cap Reporter profile picture
The chart tells you exactly what the insiders think lol .... Next
Robo Investor profile picture
Small Cap Reporter profile picture
This still smells fishy to me. Constant pump around days of news...acts more like an OTC Pink than a true NASDAQ pedigree company
Robo Investor profile picture
CEO who still owns majority of company will need to sell some shares - massive working capital deficit (with or without the converts). There's a reason this company did a Reg A, back-door IPO.

The low float makes it attractive for day-traders due to low number of shares traded/price volatility.

Also, I just don't trust the Company or any of the SEC financial figures.

My two cents.
Small Cap Reporter profile picture
Let's see if it gets pumped like last time LOL
Small Cap Reporter profile picture
annnnddd there's the pump...right on time LOL even paying for Google clicks

D Wallace profile picture
Earnings release tomorrow. Almost 90 days after the end of the quarter, and the day before thanksgiving. Strange....
Venkat Doddapaneni profile picture
I think it’s great. Solves any short to medium term cash needs and allows for further expansion at which point the company can do a secondary at a higher share price or receive additional financing at more favorable rates.
D Wallace profile picture
Any thoughts on the financing?
D Wallace profile picture
They are low on cash at the moment and at current spend they are looking at a pretty tight Q3 & 4. Does anyone have any ideas on how they might raise funds and how that would affect share price? It doesn't look like this will be a problem for much longer if growth continues but what do they do to cover the gap in the mean time?
tromy98 profile picture
Problem I have is no analysts reports. Zero. And no large outside investors. If so good you would expect more experts buying.
ScoutTrades profile picture
Isn't there a promotion on this?
rnn profile picture
This stock barely even trades..wow..almost 0 trades.
Xenogears23 profile picture
thanks this on my watchlist now
23 Apr. 2018
Good luck Steven with your long. I traded PIXY long before but I am no expert and I have not looked at it for some time. I know it is behind a paywall but if you have access you should have a look at White Diamond Research's article: https://seekingalpha.c...

That has kept me out of PIXY since.
rnn profile picture
I fell asleep try to keep it beyond the snooze level, more does not equate to more folks buying it.
Steven Highfill profile picture
Thanks for the feedback. I'm sharing my research and opinions in detail for real investors not day traders. I'm not trying to influence short-term price swings. I'm sorry to bore you.
rnn profile picture
day traders..why assume you know
Love the details, saves me hours of research. Cheers!
D Wallace profile picture
Did any of you catch that little 2x price jump when they announced they use blockchain? I was laughing so hard... sold out and bought right back in when it died back down.
Steven Highfill profile picture
Yes, during that period any release from a public company with "blockchain" in it spiked those stocks due to the crypto craze at that time. Too many people fail to understand the difference between using blockchain technology and ICOs. Blockchain ledger technology is going to be huge and its here to stay. At least now, all their releases include a disclosure saying their use of blockchain tech is not related to any ICO or cryptocurrency. They learned a good lesson.
D Wallace profile picture
Thanks for the article Steven. I have been seeing all of the same things you mentioned and watching with great interest. Your article was well written and thorough. I am long as well.
Great article. Well done - you seem very knowledgeable on PIXY. I am long and I am seeing what you write about.
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