Net Element (NETE) Zach's Small-Cap Research Report

© Copyright 2020, Zacks Investment Research. All Rights Reserved. Net Element Inc. (NASDAQ: NETE) Current Price (11/16/20) $7.35 Valuation $30.00 OUTLOOK SUMMARY DATA Risk Level High Type of Stock Small Growth Industry Internet Commerce Net Element signed an agreement to merge with Mullen Technologies, an electric vehicle assembler and manufacturer, and plans to divest its payment processing business before year-end. We expect the Mullen merger to close in Q1 of 2021. At its current enterprise value of $43.6 million, the stock is getting no premium for its pending merger and is valued only on its card processing business. 52-Week High $16.67 52-Week Low $1.56 One-Year Return (%) 96.0 Beta 1.6 Average Daily Volume (sh) 613,195 Shares Outstanding (mil) 4.8 Market Capitalization ($mil) $34 Short Interest Ratio (days) 0.1 Institutional Ownership (%) 7 Insider Ownership (%) 13 Annual Cash Dividend $0.00 Dividend Yield (%) 0.00 5-Yr. Historical Growth Rates Sales (%) 11.2 Earnings Per Share (%) N/A Dividend (%) N/A P/E using TTM EPS N/M P/E using 2020 Estimate N/M P/E using 2021 Estimate N/M ZACKS ESTIMATES Revenue (in millions of $) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) 2018 16.0 A 16.5 A 17.2 A 16.1 A 65.8 A 2019 15.0 A 16.5 A 16.8 A 16.6 A 65.0 A 2020 15.8 A 13.7 A 16.7 A 16.7 E 63.0 E 2021 68.0 E Earnings Per Share (Non-GAAP EPS before non-recurring items) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) 2018 -$0.40 A -$0.23 A -$0.23 A -$0.22 A -$1.07 A 2019 -$0.28 A $0.11 A -$0.24 A -$0.35 A -$0.76 A 2020 -$0.32 A -$0.08 A -$0.28 A -$0.21 E -$0.88 E 2021 -$0.08 E Zacks Projected EPS Growth Rate - Next 5 Years % 5.0 Zacks Small-Cap Research Lisa Thompson 312-265-9154 lthompson@zacks.com scr.zacks.com 10 S. Riverside Plaza, Chicago, IL 60606 November 17, 2020 Net Element Q3 Shows Sequential Rebound as the Merger Proceeds Using the electric vehicle peer valuation of 10x EV/sales, and owning 15-21.7% of the post merger company the company could be worth $30.00 per share once the deal closes and twice that by 2023. Sponsored Impartial - Comprehensive