MC: 131M, EV 86 M, Cash and short term 50M (trending down, risk of raise needed), no significant long term debt.
Revenue trending up, negative net income and OCF. Not much capex. Notable investment income from securities that eliminates a lot of the operating loss.
Investment income from securities:
Growth estimate: ~25% based on historical trend.
PE and EV/FCF are NA.
P/E, EV/OCF, and EV/FCF ratios.
Greenblatt ROC -170%, and earnings yield -68%. No dividend.
Management: No significant holdings, CEO incentive plan 60% tied to EBIDTA and revenue targets. Natale Ricciardi holds nearly 20% of the company as the longest board member.
Last earnings call: Merck MilliporeSigma Life Science deal noted right away. Global co-exclusive rights to sell their systems. First two years they will purchase minimum (mostly year 2, 2026) # of systems. Deal is for 5 years. Goal is both gross margin improvement and growth. Margins currently up from 8% to 12%. Not adding any contribution to outlook for 2025, but expect meaningful benefits in 2026 and beyond.
Guidance: Rev 32M, 21-25 system placements. 14% growth guided. OpEx 44-48M. Other" De&A 3M, stock com 4M, capex 2M, other income 2M. 30M Cash burn in 2025.
Base thesis: Flat guidance for 2025 sales and cash burn may require capital raise. Mgmt team is very conservative not including Millipore sales. Multi-system orders in direct sale funnel not included either given timing uncertain. Would expect them to beat to upside given how conservative they are on multiple fronts.
Bull thesis: Takeover target given no competition. Great partnerships. Management conservative outlook provides easy numbers to beat.
Conclusion: Entry position, 1 unit. Want exposure given no competitors. Expect a buyout target down the road. Would increase position if it drops significantly on news of capital raise late in 2025.