While the stock market is mostly colored red today, Socket Mobile ($SCKT) has seen a spectacular rise in the share (+108%) this morning, after the Q3 results have been announced. The company reported a revenue of $4.1 million, meaning an increase of a sensational 51%. Third quarter net income may be impacted by goodwill adjustment, after revision it will be finalized. Despite that, shareholders seem to fall for the company’s charms.
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Let us introduce you to Socket Mobile
Socket Mobile designs and manufactures intelligent mobile barcode scanners and RFID scanners. The scanners have a native data recording, which causes an application to have full control over the device. With Native support, every scan is fast, accurate and error-free. This captures productive data and POS performance that other manufacturers do not have. In addition to physical scanners, the system can also be used via a mobile phone or tablet. Some of Socket Mobile’s app partners include Shopify, Greenbits, and Lightspeed. It becomes interesting when the company implementations are examined and major international names such as Google, Apple and Dupont can be found.
In addition to providing scanning equipment, Socket Mobile is also closely involved in finding solutions for customers. For example, the company is active in retail, commercial services, industrial manufacturing, transportation, logistics and healthcare. It carries out inspections, audits and quality controls for various customers. For smaller customers it has developed a cash register system (POS) that is very user-friendly at low costs.
Why exponential growth for the weekend?
Like we noticed before, Socket Mobile reported sensational earnings for the third quarter. Revenues were $4.1 million, an increase of a sensational 51% from the second quarter. Year-on-year, total revenue declined 17.5% to $4.1 million, reporting net profit of $424,000 (up from $94,000 in the third quarter of 2019). Gross margins increased 55.3% from 52.9% a year ago and operating expenses decreased 27.2% year-on-year to $1.8 million.
Read why Green Stream Holdings is a Future Market Leader in the Solar Energy Sector
The trading volume rose to 5.8 million shares, enough to make the shares most actively traded before the outstanding shares. This is well above the daily average of approximately 308,000 shares. Socket Mobile said the reported net income does not include goodwill impairment as the company and its auditors did not complete the annual review on time. One factor that has played a role in this is the uncertainties and limitations surrounding the COVID-19 pandemic.
Trust in Socket Mobile had declined significantly since the coronavirus, as many of the main customers are ‘physical’ retailers. Many people stayed at home and physical contact seemed to diminish in the near future. When – in particular – many entrepreneurs in the hospitality industry changed their working methods and started supplying food instead of serving in restaurants, the company began to receive a lot of interest. Demand for scanners for other home services and medical purposes also increased. Therefore Socket Mobile has developed a medical-grade scanner designed to facilitate the hospital admission process.
Globally, more companies in the retail, hospitality and other social sectors are reopening again as Socket Mobile has devised a new market strategy that paid off. Last but not least, keep in mind that the figures of the Q3 report can still change, since the annual review process for goodwill impairment is not 100% completed.
Read why Green Stream Holdings is a Future Market Leader in the Solar Energy Sector
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