What strategies work best with SMSI's volatile EPS pattern?

Given Smith Micro Software's (SMSI) volatile EPS pattern, a balanced strategy focusing on stability and growth potential is essential. Here's a tailored approach to navigate its challenges:

1. **Diversify Revenue Streams**: SMSI should explore diversification of its revenue streams to reduce dependence on a single contract or market segment. This could involve expanding into new geographic markets, developing innovative products, or strengthening partnerships with multiple carriers.
2. **Cost Management and Efficiency**: Implementing robust cost management practices is crucial. This includes streamlining operations, reducing overhead, and optimizing resource allocation to improve gross margins and reduce net losses.
3. **Invest in Research and Development**: Investing in R&D can help SMSI stay competitive by developing new products and solutions that cater to emerging market needs. This could potentially lead to higher revenue growth and improved profitability in the long term.
4. **Leverage Technology for Competitive Advantage**: Utilizing technology to enhance product offerings and streamline processes can help SMSI maintain a competitive edge. This could involve digitizing contracts, improving contract lifecycle management, and leveraging AI for better customer service.
5. **Strengthen Contract Management**: Given the importance of contracts in SMSI's revenue, enhancing contract management is vital. This includes setting milestone reminders, centralizing contracts, and regularly reviewing and renegotiating agreements to minimize risks and maximize value.
6. **Enhance Financial Resilience**: Maintaining a strong financial position is critical. This can be achieved through prudent financial planning, managing cash flow effectively, and ensuring adequate liquidity to fund operations and growth initiatives.
7. **Leverage Market Opportunities**: Identifying and capitalizing on new market opportunities, such as the growing demand for family safety solutions, can help SMSI achieve sustainable growth. The company should focus on expanding its family safety solutions and targeting new product launches with carriers by summer 2025.
8. **Mitigate Risks**: Implementing robust risk management practices is essential. This includes identifying and understanding contract risks, leveraging negotiation strategies to minimize risks, and having contingency plans in place.

By focusing on these strategies, SMSI can work towards stabilizing its EPS pattern, improving financial performance, and enhancing long-term growth prospects.