May 26, 2021 - KRC Insights put out a Q2 Update on Microbix. The following is KRC's summary and below is the link for the full report.
FQ2/21: Despite strong results and strategic benefit of capital raise, valuation gap widening presents excellent entry opportunity. Reducing target to $1.80 (from $2.00) to account for equity offering.
Quarter confirmed revenue growth – 51.5% YoY revenue growth.
Margins holding up at 59.87% driving EBITDA margin of 29.6%.
VTM (largest forecast variable): management expanding capacity now in anticipation of additional orders from Gov't of Ontario and those from 3rd parties .
Equity raise removes balance sheet risk. Budgeted facility upgrades and capacity expansion (QAPs and VTM) positions company to bid on new business immediately.
Shares trading at lowest multiple vs peers. It appears that investors are waiting for something while the story is unfolding in front of them.
Lowered tgt to $1.80 (from $2.00) to account to additional shares in issue, but confidence in MBX has increased as now fully funded.
KRC Insights’ Bruce Krugel has been an active participant in the Canadian small cap equity market for more than two decades, having worked as both an equity research analyst and an institutional equity salesperson. He has broad experience in providing capital markets advisory services, research reports, identifying and executing on trade ideas, marketing companies and raising capital. The combination of these skills allows him to provide a differentiated offer that clients have found very useful.
