Questor Technologies Quick Update - $QST.to

Update after Q1 2023 financials

QST reported Q1 2023 last week. Here is my quick and dirty update.

Price: $0.92 CAD

Shares: 27.9 mil (diluted)

Market Cap: 25.7 mil CAD

EV: 12.4 mil CAD

Business Highlights

• Revenue down to 1.8 mil from 2.6 mil

  • The is due to lower equipment sales yoy

  • Both rental and service revenue up yoy

• Gross margin of 40% vs 24% last year

• The business is around break even

Thoughts

The thesis is that there will be a rebound in rental activity for the business. So far we haven’t seen it. It has increased steadily but has a long runway to get anywhere near last cycle. There is a chance that demand for their product or overall activity doesn’t return. What I like is that there shouldn’t be a need for additional capital if demand returns as they already have a large rental fleet.

Of course if needed they can access the very large amount of excess cash they have sitting on the balance sheet.

I continue to hold my tiny position. The valuation at this level is lower than the 2015/2016 cycle low based on P/B, P/TB and EV/Rev. I believe it’s low(ish) risk and has a potential for a multibagger.

Thanks,

Dean