On Track to Profitability, Price Target Increased (MST)

Research report by MST out this morning.

They have increased their price target on the back of stronger than expected results. They forecast continued strong growth and near term profitability as early as the current financial year (for the Glaucoma division at least). The price target of 48c is a bit conservative in my view, I know E&P Financial is targeting 60c per share, but it would certainly be a good starting point to getting this company's valuation closer to the fair value.

They also believe that the group is "fully funded", which is a view I also share. I think people underestimate the operating leverage here, you only need to look at the recent result and compare H2 to H1 to see the enormous improvement in the bottom line simply as a result of a bit more scale. If the growth trend continues (which I can't imagine it won't), this company will be printing cash in no time. The device practically sells itself, and the gross margins are enormous. This is not to say I don't think they will ever again do a cap raise, they may indeed take the opportunity to raise some additional cash to speed up the global expansion if the price is right (perhaps if it suddenly were to rally to $1), but it doesn't seem like they need any more cash to simply keep the lights on. iTrack Advance can take care of that. Those who are waiting for one may be waiting for a while, or for a much higher price!

Full report here: MST Access