Valuation and Forecast

Analysis Courtesy of Investorials

Valuation & Forecast

PCS Edventures!.com Inc. (OTCBB: PCSV) has begun to diversify its revenues into international markets, while building out its domestic presence with learning centers. Revenues from these strategies have helped offset sluggish U.S. educational spending, while driving the company towards a positive cash flow and narrowing its net loss.

Accelerating Growth Rate

PCS Edventures has recently begun diversifying its revenues into international markets, where it has already reported revenues of $107,518, compared to nil during the year ago period. With several new contracts announced and a renewed focus on these markets, the company is trying to significantly expand this portion of its revenues over the coming quarters.

The company’s focus on domestic learning centers represents another key area of growth over the coming quarters. While revenues amounted to just $11,501 last quarter from this segment, investors can now be assured that the commercialization of this new strategy has begun. Over the coming quarters, the company plans to build out more centers and further prove the model.

Closing in on Profitability

In addition to diversifying and growing its revenues, PCS Edventures has been cutting expenses on its bottom line and closing in on profitability.

Last quarter, the company reported a positive operating cash flow of $32,199 due to a net loss that was nearly cut in half. The reduction in expenses were largely due to operating expenses that fell 26% and a decrease in interest and debt expense due to the discounting of debt and issuance of warrants attached to financing in the prior year.

These trends are good for a couple of reasons:

  • Positive operating cash flow, resulting from lower operating expenses and steady revenues, can be used to pay down debt without raising additional equity capital.
  • Accelerating top-line results could further reduce its net loss and drive the company towards profitability on a net income basis.