Weather forecast: $2 by 18 March, page-412

1PG had $4.9m in new bookings in the last 2 quarters which will begin to be recognised as revenue in the current quarter (read their reports as to why it hasn't been recognised yet). That alone is more booked revenue than all bar 1 of the other ASX tech stocks that Acca highlighted, yet 1PG has one of the lowest enterprise values by comparison to its peers.

Burn rate is not going to continue at $5m per quarter. Management have said that they are reducing operating costs to $4m within the current quarter. So over the next 4 quarters, assuming no new bookings whatsoever, cash burn will be $11.1m ($16m - $4.9m). That still leaves ~$30m cash in the bank in 12 month's time.

Management have said that they expect new bookings to "accelerate" over the coming quarter and the rest of FY16. Given this and the fact that they said Q1 new bookings of $780k were "soft" due to its focus on product development so that their systems can handle the demand being requested of it, new bookings in the current quarter should at least be $2m (they had $4.2m in new bookings in Q4, so this isn't unreasonable). This would bring the burn rate over the next 4 quarters down to $9.1m. Assuming $2m of new bookings for the next 3 quarters and the burn rate is down to only $3.1m.

The company's internal targets are higher than this as per a presentation earlier in the year. They said in their most recent report that they are now "well positioned to [...] achieve its internal sales targets over the remainer of the year." So we could potentially see a profit within 12 months.

It's not all doom and gloom As always, DYOR