You have to spend money to make money and this is what PEH are doing. The faster a business grows its revenue the greater the short term losses and cash-flow squeeze. This is normal. Everything from new employees to increased R&D expense, implementing the software with a new client (ironing out problems), marketing expenses, commissions, travel you name it. What you hope for is a period in the future when the growth slows down and the profits and cash-flow have a chance to catch up.
I have only come into this stock recently but it seems they are on the verge of achieving a higher level of success by 1. Having a more complete product offering and 2. Having bigger clients.
Give them a chance. It's still high risk as a business but if their product works as hoped and if they can survivie the growing pains they could be something substantial in 3-5 years.
Just my thoughts. No ramping, risk still exists but so does opportunity.
EVS Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
