As of now, UCM market cap is $41.20M. Q4 results are crucial indicators of its growth momentum and profitability.
Fact: In Q3, UCM turns profitable finally in a very long time with $0.74M in Q3, narrowing its Year-to-Date Profit/Loss (3 quarters) to a loss of $0.76M.
My projection: In Q4, the base case scenario for profit should be between $0.9M to $1M, pushing FY2020 profit/loss into a positive territory of $0.2M profit. The guidance for FY2021 profit could be circa $4M.
Valuation: If the above stands, UCM is currently trading at P/E of 10, with strong cash flow and without net debt. ($0.275 would be cheap, compared to the medical device sector) But, the big question is around the sustainability of its profit and its growth. As UCM has its products in the market for several years without much market traction, until this year, as a result of COVID-19, the scenarios between "UCM being in history-making turning point" and "This is just temporary over-excitement" still present risk and reward, and will make a huge difference in valuation.
At the moment, I think the valuation is quite fair, without taking into account of the upside, and have faith in UCM's ability to establish its product as the standard of care.
