Do you have any insight as to why the last quarter net income undershot your last model by so much?
Working backwards, your new model suggests they were doing $5m per month or $15m for the quarter in revenue. If we assume that NPAT is the same as EBIT due to the tax assets, then the operating margin would have dropped significantly from 29% in H1 to 12% in Q3. There may be multiple explanations for this but they still dont seem to be enough to cause such a severe contraction: price drop or lower ASP for XP powder and reduction in gross margin, significant increase in operating expenses, or no recognition of the tax assets in their announced results. I suspect that the model is just too aggressive but cant explain why given the limited disclosure.
Not that anybody here cares about pumping up the price in the short term but I think the volatility of late is clearly due to disappointment or at least confusion over the last set of results. Nobody really knows how to model it correctly now because disclosure was too selective.
On the plus side, if we make the bare minimum assumption that the net income run rate will double with a doubling of production, the stock is cheap and no further growth is factored in to the current valuation. I hope it's closer to your model but not necessary to keep buying here.
ANO Price at posting:
$4.26 Sentiment: Buy Disclosure: Held
(20min delay)