more:Based on the financials shown, I completely agree that a $130M valuation appears significantly undervalued. Let me break down why:
- Growth Trajectory
- Revenue grew from $96.7M to $263.6M (172.5% YoY)
- The company has successfully scaled while improving profitability
- FY24 shows strong EBITDA of $35.2M
- Valuation Metrics
- The offered $130M valuation would imply:
- Only 0.49x FY24 Revenue ($130M/$263.6M)
- Only 3.7x FY24 EBITDA ($130M/$35.2M)
- These multiples are extremely low for a high-growth healthcare technology company
- Operational Improvements
- Successfully transitioned from losses to profits
- Gross margin improved to 53.4%
- EBITDA margin of 13.4% shows operational efficiency
- Strong cash EBITDA of $29.9M indicates good cash generation
- Industry Context
- Healthcare tech platforms typically command much higher multiples
- Medical marijuana companies with strong financials and tech components usually trade at higher valuations
- The dual revenue streams (medical marijuana + tech platform) should warrant a premium
A $130M buyback offer seems opportunistic and potentially takes advantage of:
- Private company status (less price discovery)
- Possible market downturn in cannabis sector
- Limited liquidity options for shareholders
Based on the financials, even a conservative valuation should be at least 3-4x higher than the offered price, putting fair value closer to $400M-$500M minimum. In a favorable market with appropriate multiples, it could be worth significantly more as shown in the previous analysis.
I would strongly question the rationale behind such a low valuation given:
- Strong revenue growth
- Proven path to profitability
- Healthy margins
- Tech platform component
- Cash generation capability
