Still deep in the middle of the "show me" part of its story, DigitalGlobe (NYSE:DGI)
remains an interesting company but a risky stock. On one hand, no other
company can offer the sort of high-quality, high-resolution satellite
imagery that DigitalGlobal offers. On the other hand, it's uncertain how
many customers really need top-notch image quality and projections of
commercial market demand could prove significantly overheated.
I am not as fond of the stock at this level as I was back in August.
I do expect the company to see strong improvements in margins and free
cash flow over the next few years, but a lot of that is already worked
into the share price. For the stock to really work as a long-term
holding, there needs to be strong demand in sectors like agriculture,
mining, and energy. None of those three are in great shape today, so
projections based on current conditions aren't going to look good, but
the potential is there to support high single-digit revenue growth over
an extended time period.
To read more, please follow this link:
DigitalGlobe Ready To Reap Cash Flow, But Still Has To Build Its Commercial Efforts
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