A more realistic scenario for FY 26 : . + 13 % for revenues (with all the growth coming from Vet-in-Schools), . + 3.3 ppt for gross margin (due to the 90 % gross margin of Vet-in-Schools), . + 3 % for operating expenses (in line with inflation).
In that case, I get an EBITDA 26 of 2.5 m$ and a free cash flow of 1.73 m$ (free cash flow yield of 13.7 %). Asssuming that EBITDA is still a proxy for cash flow from operation (if the company does not pay taxes*).
For me, the main assumption remains their ability to keep growing their vet-in-school business at a rapid pace. So far, their lead indicates that they have a good visibility for 2026.
* as they have 10 m$ of accumulated losses in their balance sheet, I do not expect them to pay taxes for a while.
RCL Price at posting:
10.5¢ Sentiment: None Disclosure: Not Held
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