SOBRsafe, Inc. (NASDAQ: SOBR) has been laying out its case for why its alcohol-detection system can be an industry game-changer. And what matters most is in the details. After all, they expose a company in hyper-growth, evidenced by signing deals with major industry players, positioning to capitalize on a significant NTSB offensive, and leveraging technology and platform milestones reached that put 2023 catalysts in near-term crosshairs. Thus, while SOBR stock gets pushed and pulled depending on broader market sentiment, it may be wise to take advantage of any share price weakness, an argument supported by SOBR being in its best-ever position to create sustainable shareholder value.
Many investors are already taking an early interest in the SOBR story and opportunity. Year-to-date, they've sent SOBR shares higher by over 131% to its press-time $2.21. Remember, though, those gains are in the face of some serious broader market headwinds. So strong, in fact, that although SOBR is ideally positioned to accelerate an already fastidious growth pace, SOBR stock is off its 52-week high of $7.50. Still, that's not all bad news. The lower price exposes a significant valuation disconnect, with an opportunity to catch SOBR shares at prices best described as ground floor levels.
That's not an overzealous representation. Based on the groundwork laid in 2022 and the deals signed so far in 2023, the path of least resistance for SOBRsafe stock is higher. Analysts also support that premise, with at least two modeling for SOBR stock to move appreciably higher this year. Diamond Equity expects the stock will reach $5.07 this year, and Goldman Smallcap Research models for $4.00. Either result presents a bullish proposition, noting that the mid-range of the two suggests nearly 100% upside potential.
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Aggressive NTSB And Private Sector Interest Fuel 2023 Growth
Meeting that upside could be in the crosshairs today. An invigorated focus and mission by the National Transportation Safety Board (NTSB) on eliminating impaired driving is earning significant headline space. While the NTSB is always intent on implementing stricter policies to enforce safe travel, they may have needed the right tools other than suggesting harsh penalties. That's a deterrent, but real progress can be made from SOBR now offering a tool to facilitate broad policy implementation- SOBRcheck.
It's one the NTSB could quickly embrace. And SOBRcheck has the inherent potential to become the most powerful addition to the NTSB's alcohol-detection arsenal in decades. Moreover, they can scale it quickly. SOBRcheck is easily implemented, easy to use, accurate, and goes beyond traditional spot-check devices by recording and maintaining cloud-based records from seamless integration in company networks. Checking those boxes makes it ideal for the NTSB agenda, which has publicly expressed its vision to help establish legislation urging, even requiring private and public sector companies and agencies to implement policy to monitor zero-tolerance alcohol abuse. The opportunity for SOBR can be even more significant.
The NTSB also recommends that the NHTSA require passive alcohol-detection systems, advanced driver-monitoring systems, or a combination of the two on all new vehicles by 2025. They are taking a further step by recommending incentivizing automakers and consumers to adopt its Safe Driver proposals. Manufacturers following that advice are more than likely, it's probable.
It's fair to question why and how SOBRcheck meets those wish-list requirements. The answer is simple. The SOBRcheck platform is unlike and far more robust than traditional alcohol-detection methods. It requires no blood sample or forcefully blowing into a tube for up to 30 seconds. Instead, it uses finger-touch technology that analyzes the natural humidity and vapor of the skin and generates 93% accuracy within 10 seconds. That bests more traditional and current detection technology that provides low to mid 80% accuracy. Still, that's just one advantage of SOBRcheck.
Advantages Of Seamless Connectivity
SOBRcheck's most compelling advantage is its connectivity enabling it to continuously monitor, maintain data, and generate real-time management reports. Often implemented at facility entry points, workers place a fingertip or palm on a small device. If the test detects alcohol, a message immediately flags the employee for intervention. This reporting functionality is a major component of the SOBRcheck platform and a significant unrivaled advantage over competing detection devices. Additionally, unlike any other known platform, SOBRcheck can interface with client infrastructures, creating reports and aggregating data via real-time reporting and analytics to monitor and manage zero-tolerance compliance.
Those abilities are doing what they should: attracting interest. Most recently, SOBR announced signing a software as a service (SaaS) agreement with the Fox Group, based in British Columbia, Canada, and with operations in the United States. The Fox Group is a leader in North American commercial driver education, counting Provincial Driver Training Institute (PDTI), North Shore Driving School (North Shore), and Fox Professional Driver Training Centers (FoxPro) among its portfolio holdings. SOBR said The Fox Group will initially install the SOBRcheck alcohol detection technology in select Canadian locations. It plans to expand that implementation to cover its entire training organization of over 3,500 employees and all student drivers. This initial agreement could lead to significant others. The Fox Group noted it's further evaluating SOBRsafe's technology for uniform installation across all portfolio holdings and for recommendation to its customers.
SOBR also signed a deal with TerraTech, one of the world's largest oilfield services and logistics providers. They installed SOBRcheck in at least two fleet and workplace applications service centers. That agreement is getting more substantial. SOBRcheck's alcohol screening performance is expected to be installed at 17 additional TerraTech locations across 11 states by the end of April. The deal can get exponentially larger from there. Through its parent entity, TerraTech is one of more than 100 companies owned by an international conglomerate with annual revenue exceeding $20 billion. Thus, the validation from implementing the SOBR technology into its own organization can open significant doors to other expansion opportunities.
Reaching into Canada Markets
International expansion is driving additional market penetrating opportunities. SOBR signed a deal with global distributor Alco Prevention Canada. Founded in 1989, Alco is a leading provider of preventative alcohol detection solutions, selling to more than 5,000 customers across 45 countries. The deal immediately contributes to new revenue streams inherent to Alco purchasing SOBRcheck™ inventory, executing a defined plan, and dedicating resources to launch SOBRsafe's ground-breaking touch-based technology in Canada. Alco said it performed nearly 100 tests on the device, proving it was easy to operate and highly accurate. Impressed by its potential, they expect substantial demand for SOBRcheck technology worldwide and note feeling fortunate to be the first company in Canada to get on board with SOBRsafe. There's more fueling the bullish proposition.
SOBR inked a deal with BGM Electronic Services, Inc. that can also get appreciably larger. They will use SOBRcheck™ as its new front-line alcohol screening solution, likely expediting SOBR's further entry into the $4 billion U.S. manufacturing market. Moreover, it could fast-track introductions and relationships with major auto manufacturers, including BGM clients Ford (NYSE: F), GM (NYSE: GM), and Stellantis (NYSE: STLA). BGM can open that door. During the height of the COVID pandemic, General Motors contracted BGM for the GM/Ventec/U.S. Government Ventilator Project, successfully delivering 390,000 electronic assemblies for 30,000 ventilators in just 150 days. As a result, GM designated them its 2020 Supplier of the Year - Over Drive Achievement Award.
Remember, these major auto manufacturers are also well-connected in the logistics and defense sectors, which supports speculation that the hands shaken with the autos could lead to more of the same from manufacturing powerhouses like United Parcel Service (NYSE: UPS) and FedEx (NYSE: FDX) Whether befitting directly or through a third party, SOBR, and inherently shareholders, are likely winners.
More Deals Accretive To Growth
There was more value added last month. SOBRsafe announced signing a software as a service (SaaS) agreement with a prominent Native American tribe, a self-governing nation serving thousands of members in the United States. Terms call for initially implementing the SOBRcheck™ technology to ensure its transit fleet is 100% alcohol-free.
While a client making good use of SOBR's unintrusive method of supporting safe operations is excellent news for all involved parties, the deal should be particularly compelling to investors because it can open the door to significantly more revenue-generating opportunities with the sovereign tribal nations. In fact, this initial deal could open pathways to additional implementations across other critical, safety-sensitive functions and potentially expedite SOBR earning further business from among the 574 tribal nations in the United States.
Another deal signed in February can't go under-appreciated. Then, SOBR announced signing an agreement with Continental Services to implement its technology to monitor its 1,800 employees across four states. The update noted the attraction to SOBRcheck resulting from its practical, easy-to-implement solution to proactively manage alcohol policy while complementing existing safety procedures.
Industry And Private Sector Accolades
Don't think the benefits of SOBRcheck are going unnoticed. They are getting many high-level accolades, including its recognition as Occupational Health & Safety 2022 New Product of the Year and Child Safety Networks Safe Family Seal of approval for Safety Monitoring Devices. That recognition does more than boost SOBR's resume credibility; it validates the platform from respected and national independent sources.
That validation goes beyond SOBRcheck. SOBR's other detection devices, including the SOBRsure™ wristband, which utilizes the same touch technology but as a wearable device, are also earning wide praise. The wearable provides a considerable competitive advantage because it allows for initial and ongoing employee management. The SOBRsure wristband applications make it an ideal alcohol-detection tool for DUI management, school bus companies, ride-share companies, and last-mile fleet businesses. Imagine Uber (NYSE: UBER) requiring the wristband for its drivers. In addition to making sense for them to do so, it would potentially put billions of dollars in revenue-generating play for SOBR. Incidentally, SOBR can also defy gravity, so to speak. A deal with Butterfield Onsite Drug Testing expands SOBR's reach into the airline industry, providing alcohol-detection procedures for pilots and ground crew.
Other deals add to the SOBR value proposition, including value inherent to agreements made with North-Star Care and RecoveryTrek, both intending to use SOBR technology later this year to manage patient treatment. Additionally, a partnership with the ride-share app RubiRides provides another example of a practical solution to dangerous potential and liability. RubiRides specializes in trustworthy transportation for kids, exposing a need for drivers to be reliably tested. SOBRsure™ wristbands are the perfect tool to meet that challenge since they continually monitor alcohol-free safety, upload data to the cloud in real time, and enforce sober driving. They hope to add it to their policy as early as the end of Q2 2023.
Positioned For An Upside Breakout
All told, SOBR's sum of its parts does expose an attractive opportunity. And it keeps getting stronger as the company continually executes its strategy to penetrate high-dollar market opportunities sooner than later. Frankly, the intrinsic value of its device technology can support current and higher prices. It's the inherent potential, already being exploited by large companies, that shows potentially exponential growth for SOBR this year.
Indeed, the sentiment of those covering SOBR is decidedly bullish. However, considering the work done setting the stage for growth in 2023, it's a position easily justified. And the better news for those just learning about SOBRsafe and its technology is that while Q1 resulted in several significant deals, there are likely plenty more to come. Trading ahead of them may be a timely consideration.
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