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One Stop Systems Has A New Identity

Apr. 02, 2021 8:28 AM ETOne Stop Systems, Inc. (OSS)23 Comments
Sergio Heiber profile picture
Sergio Heiber


  • Management is steering the company into establishing a commanding position in the A.I. Transportables niche of the edge computing industry.
  • OSS is building on a solid footing as a provider of custom computing solutions.
  • The pandemic has masked the improvements that have been made.
  • The company is well-funded to make acquisitions.
  • The current stock price discounts the probability of revenue and profitability improvements.

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One Stop Systems (NASDAQ:OSS) is a provider of customized high-speed edge computing solutions. Edge computers need to be rugged to withstand extreme environments and are housed where a vast amount of data must

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Sergio Heiber profile picture
I write about and invest in mostly early commercial stage companies that have a large TAM and zero to little direct competition. I will provide updates on companies that I introduce as long as the goalposts set by management are met. Of course, there are always unforeseen developments more often in the microcap world than otherwise and there are macro conditions that are beyond the control of company management. I'm also not always right but I like the risk/reward characteristics of investing in micro-caps.My articles are reflective of my investment interests and hopefully provide readers with ideas that they can further explore. I tend to be on the long side and generally abstain from writing negative or short themes. Besides my articles on SA, readers can find my work at MicroCapClub.com and StockPick.app

Analyst’s Disclosure: I am/we are long OSS. 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.

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Comments (23)

Sketlux profile picture
@Sergio Heiber Looking at their customers OSS should benefit from increased military spending, right?
Sergio Heiber profile picture
@Sketlux Yes, I agree. They have eight products for the military market, a new flagship platform and a bulked up sales team. Germany announced that they are bulking up their military budget. Some of that money may come to OSS.
Any fresh feelings about OSS?
Dinjax profile picture
@Sergio Heiber any ideas about why OSS got hammered today? Down over 14% on no news that I could find with above average, but not excessive volume (396k).
Adambombfx profile picture

All small caps hammered today as the interest rate suddenly dropped, I'm a long term holder of OSS for 3 years and the company is right on track to end the year at $10 per share.

Today was a buying opportunity across the small cap universe !
Murad Shawar profile picture
@Adambombfx I has this one and made money on it and sold looks like a opportunity to get back in
Dinjax profile picture
@Adambombfx thanks. It's good to know I'm not missing something. OSS has definitely been a roller coaster.
Dinjax profile picture
Thanks @Sergio Heiber for another educational article on OSS. I also appreciate your engagement with the company to clarify the impact of the chip shortage.
Their Q1 guidance of $13M is a little concerning since Q4 was $13.9M. It also seems low in light of the $7M in delayed, mostly Raytheon sales that would presumably be made up early in the year. Just adding $7M to annualized Q4 gets to 20% growth. What are your estimates? Do you get the sense that they are sandbagging?
Long OSS and looking to add on this dip.
Sergio Heiber profile picture
Thank you @Dinjax I also thought that the $13 M guidance for Q 1 looks low. It's not only lower than for Q4 but slightly lower than for the same quarter the prior year. It must be due to Covid-19 restrictions haven't been fully lifted yet and no guidance was given beyond Q 1 due to the uncertainties. I find CEO Raun to be a straight shooter, so I don't think there's sandbagging going on.
I think the company will have record revenue and earnings this year.
@Sergio Heiber Hey guys,
I'm highly interested in this company and follow you for quite a while, but since I'm from Portugal I don't really understand the phrase of "sandbagging" haha could you explain what Zou are talking about please?:)
All the best, Klaas
Sergio Heiber profile picture
@klaas.ick Sometimes companies provide lower than expected revenue guidance so that they can please shareholders by beating the estimate. I love your country and hope to visit again.
Sergio Heiber profile picture
From CEO Raun:

"We had a number of similar questions at and after the earnings call. We shared that throughout 2020, we had issues but the team did a good job of planning ahead, asking for favors, etc to make sure it did not impact revenue. At times, this meant we had the inventory higher than I would like. I would rather be a little higher on inventory than not able to ship.

As far as 2021, the market is tighter than 2020 especially with GPUs, memory and PCIE Switch chips. We have seen longer lead times and some increased pricing. I think many people are concerned about the GPUs. The GPU shortages are more on the “low” to “mid” end. This was driven by people working from home and other things. For the most part, we use the very high end GPUs which tend to be better. We also have a close relationship with the supplier directly. In summary for 2021, we will see challenges, but for the most part I think our planning and relationships should minimize the impact."
Patrick Irish profile picture
Great article Sergio.

Do you know if the global chip shortage has hurt any of their production or sales?
Sergio Heiber profile picture
@Patrick Irish Thank you Patrick. I have not seen that they've been affected by any supply chain issues. I do know that their reliance on China is very small.
GreenGrowthGeek profile picture
Thanks for the update Sergio. Once Pandemic headwinds lessen considerably OSS seems to have the disruptive tech and now a clear business plan to find continued success. I see a similar path ahead for CODA which has had its progress stalled due to the Pandemic more than most tech companies.
I love this company and stock. My concern for this year is, how are they being hit with the silicon shortage, I know they were buying up GPUs last year.
Adambombfx profile picture
Been in OSS a few years now since $1.62 !!! Thanks for the article,great writing.

Thanks for the follow-up.
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