If you are searching for a high-potential small-cap technology stock that offers a good risk-to-reward trade, look at MobileIron stock.
Mobileiron Inc(NASDAQ:MOBL) is a developer of advanced mobile security solutions for the growing “‘enterprise mobility management” (EMM) space in financial services, healthcare, pharmaceuticals, and the federal government.
The MobileIron solution secures data in mobile devices, applications, and the cloud as well as the movement of data between devices and platforms.
The tailwinds in the EMM space are strong, especially as more people use their mobile devices for transactions, connecting to networks, and other critical communications.
MOBL stock has outperformed the S&P 500 and the Nasdaq with a 27% gain this year. On the chart, MOBL stock established a decent base of support at around $3.00 prior to staging an upside breakout on a bullish golden cross, where the 50-day moving average broke above the 200-day moving average.
Chart courtesy of StockCharts.com
The Fundamental Bull Case for MOBL Stock
A look at the fundamentals supports the rally in MobileIron stock with rising revenues and a move toward potential profitability by 2019.
|Revenues ($ Millions)|
MobileIron does need to address its declining revenue growth rate, which is expected to see some improvement on the horizon.
For 2018, revenue growth is expected to improve to 9.7% to $193.6 million followed by 8.9% to $210.77 million in 2019. (Source: “MobileIron, Inc. (MOBL),” Yahoo! Finance, last accessed April 13, 2018.)
MobileIron has been able to control its cost side and drive cash flow and cut losses.
The earnings before interest, taxes, depreciation, and amortization (EBITDA) growth moved from a negative figure in 2014 and 2015 to two consecutive years of growth, including growth of 1,894% in 2017.
The result of the stronger EBITDA growth by MobileIron has translated into a narrowing of losses in 2016 and 2017.
If everything goes to plan, MobileIron could see its loss decline to $0.08 per diluted share in 2018 and could turn a profit of between $0.01 and $0.04 per diluted share in 2019.
MOBL has no debt on its balance sheet. The key free cash flow (FCF) is negative but has fallen in two straight years to only -$3.42 million in 2017.
|Free Cash Flow ($ Millions)|
The move to positive FCF will allow MobileIron more flexibility to undertake corporate initiatives such as capital expenditure.
The MOBL stock chart looks bullish and indicates that a firm base has been established. If MOBL stock can break higher, we could see a targeting of $5.30 to $6.80 and an eventual retest of $9.00 last encountered in 2015.