Pitt Street Research ReportEvolving into the World's Dominant Kava Company
Pitt Street Research has released an update to its research report on The Calmer Co which sets base case valuation of $0.016 per share and a bull case valuation range of $0.018-$0.024 per share.
Highlights from the Research Report
Market capitalisation is $59.5m in the base case and $77.5m in the bull case.
Calmer Co. finished FY24 with $4.3m in sales, a figure that was more than double FY23 sales
In the first 6 months of FY25, the company has already surpassed FY24’s figures and recorded an annualised revenue rate of $10m in the month of October 2024.
The company reduced net cash used in operations by half in Q2, after inventory was accounted for, with cash burn of $142k per month, down from $284k per month in Q1 of FY25.
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The valuation thesis used by Pitt St Research is not only based upon the company’s top and bottom line growth (driven through expansion of its offerings and into new markets, as well as increased operational efficiency and productivity), but it considers two other societal trends.
The first of these is a growing awareness of the health benefits of kava, particularly towards anxiety, not to mention the growing presence of these conditions. Anxiety is a large market opportunity. An estimated 2.7% of US adults will have had Generalized Anxiety Disorder in the past 12 months.
We also see the potential for kava to make its mark as an alternative to alcohol. Alcohol use is declining, particularly across younger generations in Western jurisdictions.
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CCO Price at posting:
0.6¢ Sentiment: None Disclosure: Held
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