News: NXS Next Science Sees Unaudited Product Sales For 2Q To Be Above $5.6M, page-3

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Dealsmatey

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29/06/23

16:36

Post #: 68538386
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Originally posted by MikeMelb1969: ↑

This is absolutely fantastic news and reflects significant momentum in sales - probably due entirely to the BlastX Collagen DME product.
It's great that its mostly direct sales (higher margin).

If they keep anywhere near this growth rate up, we should see well over US$20m in sales for the year.

I expect that this doesn't really reflect the huge potential of the Xperience product. Sales of Xperience is growing, but we need the study results to take that to the next level, so could be waiting a while.

As soon as this company gets to cashflow breakeven, the real ride will begin.

A medtech/biotech company at the NXS stage of development growing revenue at over 100% per year with gross margins over 75% should trade on a revenue multiple well over 10 times. Averages in the Biotech/Medtech space in early 2023 showed mean valuations of 7 times one year forward revenue, with mean CAGR of 10%+.

NXS is likely to grow revenue by over 100% this year after 30% growth rate last year (pre-BlastX DME product).

So, if you put that all into a calculation of value:

2023 Earnings - conservatively estimated at AU$33million
10X multiple given the high growth rate.
Valuation = AU$330m
Share price = $1.83
Current price = $0.57
Upside potential = 220%

And I don't think this reflects much value for Xperience. So upside valuation risk on clinical trial outcomes.
NXS just need to get to a cashflow breakeven level to mitigate the risk of further capital raises being required.
Very tightly held company. At some point, this is going to be on the radar of the big Pharma companies.
Imagine the NXS products in the hands of one of the Pharma giants!

DYOR
GLTAH

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Interesting analysis.

I am curious on what happens with the $10m debt here.

If Walker doesn't convert to equity, NXS will have to redeem the notes, but it doesn't have the cashflows yet. Walker Group has it secured over all assets of the company, so I wonder if it would enforce its security.

Strange arrangement to enter IMO.

NXS Price at posting: 58.0¢ Sentiment: None Disclosure: Not Held
3 Upvote

1 Great analysis

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