Limitless X (OTCQB: VYBE) is a small-cap, low-float company targeting a revenue-generating niche in the massive health and wellness market niche. Actually, calling its focus “niche” is an understatement. Recent estimates put that sector’s combined global sales opportunity at over $4 trillion. That means earning just a tiny slice of that opportunity can result in enormous revenues. VYBE intends to score its share through a diversified business strategy.
Here’s the better news. Targeting any one of the sectors parts puts potentially huge revenues in VYBE’s crosshairs. Broken into pieces, the U.S. health and wellness industry is valued at $1.2 trillion, accounting for about 28% of the worldwide market. The largest sector of the global health and wellness industry is personal care and beauty, valued at $955 billion. That slightly eclipses the revenue-generating opportunities from the healthy eating, nutrition, and weight loss sector, valued at $946 billion. The remaining opportunities lay outside the U.S. borders, an opportunity VYBE expects to exploit in the coming quarters.
But here’s the compelling part of the VYBE consideration. They don’t want just one part, they want several. And even without overseas sales contributing, the plan to expedite 2023 growth could be more than enough to generate significant and sustainable shareholder value. In turn, from a revenue multiple perspective, with only about 3.63 million shares in the float, that could support a model showing the path of least resistance for VYBE shares is higher.
The Case For A Higher Valuation
A case is made for that assumption. After acquiring Bio Lab Naturals in 2022, Limitless X is penetrating target markets with an impressive stable of assets. Moreover, the company shows no signs of slowing, with serial entrepreneur and new Chairman and CEO Jas Mathur leading an aggressive charge to establish his company as a significant sector player, a goal he believes can be reached through acquisitions as well as revenue-generating brand and product development, digital advertising, marketing, and direct to consumer fulfillment solutions initiatives.
Benefiting from a running start, VYBE is already serving A-list brands and clients across the United States, building value through the strength of an adept management team versed in capitalizing on and maximizing the potential inherent to the health and wellness industry. In fact, Jas Mathur, a successful entrepreneur, investor, and venture capitalist, could be the key to this small-cap company doing some big-time things, which many believe can happen sooner than later.
That bullish assessment is supported by precedent from Mathur’s proven ability to generate value through his e-commerce and product development expertise, where he has helped develop multiple brands in the marketing, health, and wellness spaces that have combined to deliver millions of dollars in revenue annually. There’s more to appreciate.
More than Jas Mathur leading the company, he’s also deeply invested in it, contributing roughly $5.1 million to Limitless X and converting loans into preferred stock to remove debt from the company. That does at least two things from the start. It aligns insider interests with common stock shareholders. Secondly, it eliminates debt overhang in an environment where investors are pushing valuations of small-cap companies lower in fear they will need to tap higher-interest capital markets to accelerate growth.
Positioned For Near And Long Term Growth
However, VYBE appears positioned to sidestep that potential hurdle, with a current balance sheet able to fuel its growth strategy and, as importantly, sufficient to generate organic growth while expanding its market presence. And not entirely organically. VYBE is on record saying it continues to seek industry-relevant companies to acquire to further expand its product line and operational footprint. If successful in those endeavors, VYBE could beat preliminary sales, earnings, and net revenues estimates, which are guided to reach upwards of $40M in its 2022 fiscal year.
That’s a big number, and an update should come soon. But remember, Limitless X expects to hit that target from already serving over one-million satisfied U.S. customers in its Direct-To-Consumer (DTC) eco-system, a segment leveraging a business model able to offer a better customer experience while keeping costs down and increasing profits. Companies that can do what VYBE is doing are earning Wall Street attention. Headlines support that investors are focusing on the coveted health, wellness, and beauty categories and paying a premium to those companies that can capitalize on the extraordinary momentum behind the e-commerce movement.
In particular, investors appear more focused on companies able to serve the demand for innovative and impactful wellness products through an e-commerce business model. Keep in mind that while many pedestrian-driven markets are returning to normalcy after the global pandemic-related shutdowns, the e-commerce market has been slow to give up its accrued revenue-generating territory. That’s the area where VYBE can shine.
Remember, too, that VYBE isn’t one-dimensional. They are a creative and empowering lifestyle agency well-versed in capitalizing on the full spectrum of digital advertising and marketing through an eco-system targeting Health & Wellness, Beauty & Skincare, and C-B-D.
A Better DTC Business Model
Moreover, VYBE utilizes an effective and efficient direct-to-consumer (DTC) business model, allowing it to sell its product directly to its end customers without the help of third-party wholesalers or retailers. Of course, how VYBE does business is a significant departure from the traditional brick-and-mortar models, which continue to shed value due to a competitive landscape where easier-to-use online shopping options are now mainstream.
The excellent news for VYBE is that the trend isn’t likely to slow. On the contrary, e-commerce is more than a mainstream business model; it’s expected to become THE predominant way for companies to maximize sales by providing customers with a seamless experience that increases the likelihood of repeat orders.
CEO Jas Mathur expects a bright future for VYBE. Post-acquisition in 2022, he noted that his company is better positioned than ever to advance a corporate strategy and mission to make Limitless X the premier digital brand powerhouse for its clients and businesses. The “VYBE” name, an acronym for Visualize Yourself Better Everyday, is an active mission statement keeping leadership focused on a simple but essential premise: keep chasing excellence.
There are reasons to support his optimism. Leadership has proven its ability to develop brands and assets through innovative digital marketing and branding campaigns. In this case, history may repeat, a result of Limitless X successfully launching numerous industry-leading products in the dietary and CBD supplement sectors. And with over 7 million Instagram followers and frequent collaborations with leaders in the sports and entertainment industries, the better news for client brands and VYBE portfolio assets is that business generally hits the ground running.
Not to be confined to the health and wellness sectors, VYBE is penetrating new revenue-generating markets, with plans to utilize its company’s intrinsic strengths to penetrate personality development, life coaching, and educational platforms market opportunities. Those do more than fit accretively into an already growing portfolio; the plans could help VYBE establish a leading competitive position in these emerging market segments.
Seizing Its Opportunities Could Fuel 2023 Breakout
The bottom line: VYBE is well-positioned to meet its lofty estimates. And if they do, its current $2.95 share price may fall short of an appropriate representation of value, especially considering its low outstanding share count compared to expected revenues. Indeed, it’s easy to calculate that sales of $40 million and its current share structure can justify a significantly higher share price.
Moreover, the VYBE business model isn’t only intending to drive top-line growth; it’s expected to generate faster bottom-line growth as well, meaning that multiples would get additional support to maintain anticipated appreciation. Thus, while VYBE may be an under-the-radar company today, based on its fresh approach to business, that may not be the case much longer. The company is doing the right things at the right time by addressing client and acquisition opportunities in a 21st-century way.
That difference is more than facilitating VYBE’s growth; it could transform them into a digital sales and product development powerhouse. Remember, all companies start from scratch. So, from an investment perspective, it’s usually best to find one with a running start. Proven many times over, from management strength to portfolio enrichment, VYBE makes that list.
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