Mitek Systems (MITK)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Small companies often have reporting and regulatory issues, but they are not always 'bad' in reality, but always bad in perception. In the most recent case, we think the reasons are benign. The SEC has made changes to its EDGAR public filing system, and MITK says it had issues resulting in problems transferring its files to the new system. Some other companies have also experienced such issues. EPS of 15c fell from 22c last year, but were ahead of 14c estimated. Revenue was in line with estimates but fell 5% to $37.7M. However, its year forecast was marginally reduced to $180M+, below estimates of $182.2M. A bit disappointing, but hardly a disaster here, really. The balance sheet is still decent and 20% growth is still expected. 
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

With continuing issues of being non-compliant and receiving a 'delisting determination' from the Nasdaq, we would continue to see this name as a hold. Momentum and earnings results have been improving, but the inability to comply and report in a timely manner is concerning and representative of a management team that is currently not executing well. We like the company's operations and its fundamentals, however, due to its non-compliance and notice that its 10-Q for the period ending December 31, 2023, which is due on February 9, 2024, will not be completed until its 10-K has been filed. Until these issues resolve, we would be comfortable holding the name. 
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They have proprietary technology which is good. It's okay.

A good company in the right space. He's surprised that no one has bought it.