Sysorex Global Holdings Corp (SYRX): Time To Slow Down On Acquisitions?

Posted by George Brook December 30, 2014 0 Comment 922 views

Sysorex Global Holdings Corp (NASDAQ:SYRX) has undergone several transformations as a company. One of the most notable is that the company has in the past few years turned into a diversified technology organization than simply an IT services company that it used to be in 2012.

Cash position

As Sysorex Global Holdings Corp (NASDAQ:SYRX) grows and transforms, several gains have been realized but challenges have not been absent. One of the challenges is that Sysorex seems headed to a cash shortage situation. The company ended the most recent quarter with just about $2.7 million in cash. The new cash position not only declined from the previous quarter, but also signaled that the company needed to make some adjustments to address the cash situation.

The company has made several acquisitions that have reduced its cash positively. However, the acquisitions have yet to improve revenue in the company. As such, the time may have come for Sysorex to slow down on acquisitions and instead focus on organic growth with the available funds. Otherwise, the company might be forced to turn to toxic fundraiser, which may turn away investors and weaken the stock.

Growth potential

Although Sysorex Global Holdings Corp (NASDAQ:SYRX) is not currently growing revenue in the pace that investors want, there is no doubt that there exist huge revenue potential in the company. According to the analysts at Vista Partners, Sysorex is a promising technology company. Analysts at Vista cited the three acquisitions that Sysorex has made since 2013 and how the position the company for big revenue growth in the future.

Vista observed that spending on hardware, software, and IT services is expected to come to a combined $3.8 trillion this year. Over the next five years, spending on such IT items and solutions is expected to increase by an average of 3.1%. That means more revenue opportunity for Sysorex Global Holdings Corp (NASDAQ:SYRX) and its peers in the segment. Vista issued $8.50 target price on the stock.

About George Brook

George Brook covers money and politics for GDP Insider. George is a veteran journalist who has also covered Congress, national political conventions and presidential politics. George also covers the White House as well as economic and domestic policy for GDP insider. George's reporting has won numerous awards, including two Scripps Howard awards, two National Headliners, two Gerald Loeb Awards, as well as honors from Sigma Delta Chi and the National Press Club.

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