It includes a link to an article in CRN magazine from that same month where SEVI is referenced as predicting 6.5 million in revenue for the current year (through May ‘07), or approximately a 45% increase over the ’05-’06 revenue that was just reported.
This predicted increase appears to be supported by their expansion plans. SEVI’s Next Hire office in Houston demonstrated a 131% increase in Revenue for ’05-’06, and Next Hire just opened a new office in Austin in June. Since Next Hire’s revenue currently comes from the Oil/Gas industry (their major clients are Shell Oil and Staffing Technology), it can be expected that this revenue will remain strong in the near future. SEVI is currently predicting a 70% increase in Next Hire’s revenue for the current year: from 1 million to 1.7 million. (Next Hire receives its revenue as payments from the hiring company equal to 15-25% of the annual salary of the hired individual.)
Furthermore, SEVI’s consulting division has just undergone a makeover that has already allowed them to win several new contracts (prior to this change, their major client was the State of Texas government). They have recently become a managed service provider which allows them to provide their computing services via remote access and thereby become much more efficient, with predicted gross profit increases. See the below description of this recent change:
In its annual report, SEVI states its intention to double its consulting and Next Hire sales force this year. In addition, they plan to hire 8 or more Microsoft-certified consultants and 8 or more Next Hire recruiting professionals this year. This hiring boom would result in a 64% increase in their employees, from 33 to 54. Their stated reason for these additions is that the demand for their services outreaches their current manpower.
If their gross margins remain stable at 64%, then they’re predicting 4.3 million in gross profit for this year. Divide 4.3 million by roughly 300 million shares (this number includes additional likely dilution since the 250 listed in annual report) and you get a value of 1.7 cents/share.
Although SEVI is still a penny stock and you should certainly do your own research, it appears 0.017 is a conservative estimate of SEVI’s real value based on their current number of shares and their predicted revenue for the coming year.
