Pulmatrix Inc (PULM)

[StocktraderDK]

PULM : Financial Due Diligence

Preface: I am NOT a financial advisor

Background: B.S. Accounting

Summary: I consider PULM to still be undervalued according to the financials

source: [https://www.morningstar.com/stocks/xnas/pulm/financials](https://www.morningstar.com/stocks/xnas/pulm/financials)

The good:

* Good financial health and has the ability to cover its debts
* Quick Ratio: 3.38 (Above 1 is normally considered good)
* Current Ratio: 3.51 (Has the ability to easily cover all current debts; A/P, etc)
* High Revenue Growth
* Seen dramatic climb in revenue over last 3 years
* 2017: .34mil
* 2018: .15 Mil
* 2019: **7.91** Mil
* TTM: **12.32** Mil
* 111.59% increase
* Increased Profitability
* Also included in the Bad
* While posting higher operating income (linked to gross profit), they are still posting a loss year-to-year
* Increases to R&D
* 28.5% increase over the last 3 years. TTM shows a 40%+ increase to the budget.
* This is a personal metric I monitor in companies, I find that companies that have a strong focus on R&D tend to perform better.

The Meh:

* P/B value is 2.71; Depending on the investor this can be seen as good or bad. However it is considered to be on the lower side of penny stocks (the lower the P/B value, typically the more undervalued, I use sub 3 p/b value as an indicator of undervaluing).

The Bad:

* Low (negative) Profitability
* ROA: -53.9%
* ROE: -107%
* Net Margin: -166%
* However, profitability is not always considered in evaluating a company, however, it is important to consider it when investing in a company.
* High P/S Ratio
* 3.72
* This ratio compares how much investors put into how much the company produces in sales. The lower the ratio, the better for investors. Typically a good range is between 1-2 depending on the industry.

Moderate-to-good potential growth, however, will probably not hit above $10 a share for a long while IMO. However, I've been wrong many time before.

I personally have it as a price target of $6.50 by end of the year

Source:
U/OnlyAnAccountant