Shares of iCoreConnect (ICCT 31.84%) are skyrocketing 39.8% higher as of 11:07 a.m. ET. The huge gain came after the healthcare technology company announced late Tuesday evening that trading of its shares would resume at the market open on Wednesday.
Trading of iCoreConnect's shares was halted on Tuesday. This halt occurred after the discovery that some shares didn't convert correctly following the company's merger on Aug. 25, 2023, with FG Merger, a special purpose acquisition company (SPAC).
iCoreConnect stock had vaulted more than 250% higher on Tuesday when trading was suspended. Today's move picks up on that impressive momentum.
Investors are obviously super excited about iCoreConnect's prospects. The stock has risen more than 40x since the combination with FG Merger. However, "irrational exuberance," the phrase used years ago by former Federal Reserve Chair Alan Greenspan, comes to mind.
iCoreConnect projects revenue of $17 million in fiscal year 2023. Its current market cap is more than 14 times that level. Even if we use the projected annualized recurring revenue of $29 million that the company hopes to hit by the end of this year, the stock trades at a steep price-to-sales multiple.
iCoreConnect continues to pick up partnerships with state and regional healthcare associations that use its cloud-based workflow platform. The $18.8 million in proceeds generated by its merger should help the company fund efforts to drive future growth.
However, iCoreConnect's subscriber count rose by only 14% between announcing the combination with FG Merger on Jan. 6, 2023, and the completion of the merger on Aug. 25, 2023. The company will need much higher growth to justify its lofty valuation.
https://www.fool.com/investing/2023/08/30/why-icoreconnect-stock-is-skyrocketing-today/
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