FRX & UNL operate in a similar segment and compete directly with the data aspect of their SIM offerrings.
To be clear, FRX don't offer cheap roaming calls, and this segment of UNL's business is diminishing in importance by the day.
I believe both companies are undervalued, however the reasons FRX is trading at a significantly higher vaulation is:
Revenue:
FRX's revenue $1.5m tripled for the quarter YoY. (+208%)
FRX's revenue is received directly from its end customers and diversified across 126 countries. It's underlying product is far more cost effective than UNL's and it is typically recurring.
UNL's revenue increased by only 47% YoY off a woeful equivalent reporting period. It is centralised mainly in Australia, NZ, UK, Canada & Singapore through a few partners. If any of these countries have a price war or your partners choose an alternative, lookout! NOR has developed a cheaper version of WiFi.
Expenses:
UNL has been slashing expenses in reponse to restructuring and losing orders from their partners (including their largest partner Covermore).
FRX have held most costs relatively flat, whilst aggressively spending on marketing to capture recurring revenue. Network costs have increased to accomdate the surge in users by 186%.
Cashflow:
UNL's position was aided massively by the $520k R&D grant. The underlying picture is not so rosy. Couple this with Covermore orders ceasing this quarter, provides uncertainty for future growth. (This will hopefully be offset by InsureTech, WiFi & SOS, however these aren't contributing significant revenue yet).
FRX's cashflow is the best it has been since the launch of the X microchip. The user base is steadily growing, and 40% of revenue is recurring. If FRX were to cease all marketing activity (I believe UNL used 'standstill' in one of their reports last year) then they would be far more profitable. However, they are continuing to invest in growth. They also have signed confirmed distribution orders exceeding $400k that will provide future revenue growth, and have ~80k microchips distributed with wholesalers. (I believe UNL have ~11k, with much lower conversion rates).
So, to summarise I believe it is the trajectory of growth, recurring nature and geographical apread of FRX's revenue's that provide it with a superior valuation.
I can't underscore how important recurring revenue is. It is widely accepted that recurring revenue is valued at double once-off revenue. (Typically for SaaS providers it is 6x vs 3x).
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