EZZ is obviously a high risk company.A bit curious that a health...

EZZ is obviously a high risk company.
A bit curious that a health care company (mainly selling health supplement products under their EZZ brand) has no manufacturing facility and almost no R&D.
Another short term risk is that, so far, a large part of their sales comes from China (72 % of FY 23 revenues). The company is clearly addressing this issue through its most recent distribution agreements (in South East Asia) and their entry into the US market.

But we have also to recognize the positive elements of this company :
- high growth (+ 70 % yoy for receipts from customers for first 9 months of FY 24),
- strong gross margin (almost 80 %),
- already profitable (net margin of 9.7 % in FY 23) , despite very high marketing expenses (55 % of revenues).

The company is also regularly producing positive cash flow and free cash flow.
In FY 23, the company produced a cash flow from operation of 4 m$ and a free cash flow of 3.7 m$, which corresponds to a free cash flow yield of 7.7 % (with a share price of 1.40 $).
The main problem, so far, is that there is a large volatility for their cash flow.