My concern with Bubs is they haven't re confirmed in the last...

First 2 Last

Share
Profile

Follow
ozboypete

869 Posts.

54

01/10/24

15:39

Post #: 75927950
Share

Originally posted by saintex: ↑

While the company has been loss making for some time, Bubs seems to be able to turn EBITDA and cash flow positive in FY 25.
In order to reach such targets, they expect to increase revenues by 28 % and cut costs by 11 m$.
Both targets are achievable :
- this revenue increase is in line with the revenue growth in FY 24 (+ 33 %) and is expected to be explained by a growth over 50 % both in the US and China (together they represent 65 % of sales),
- cost cutting is explained by 2 kind of one offs in FY 24 (FDA regulatory costs of 7 m$ to get permanent access to US market and 5 m$ of litigation costs).

If Bubs is able to maintain such a revenue growth in FY 26, without a significant cost increase, it could reach an EBITDA of around 5 m$ in FY 26.

It is quite obvious that this stock is cheap after its 90 % decrease during the last 5 years.
The best way to see it is probably the tax saving potential : as the company has 331 m$ of accumulated losses, it has a potential of tax savings of 99 m$ (at 30 % tax rate).
It corresponds to 11 c/ share, while the share price is now 12.5 c.

Looking at its P&L, the main question is probably why the company has so high fixed costs, while it has already a significant size (revenues of 80 m$ in FY 24) and a decent gross margin* of 41 %.
Also interesting to note that they have already a high market share of around 50 % in their 2 main markets (US and Australia) for goat milk infant formula.

Other element to note : while this stock may look risky, like most of recovery stories, it has a beta of only 0.35.
The main risk in their case is probably the uncertainty to get the permanent FDA approval by Oct 25.

* vs 45.8 % for A2 Milk.

Expand

My concern with Bubs is they haven't re confirmed in the last few annoucement of there plan to be cash flow positive in FY25. I how they are, however then need to come out and advise so.FYI, since February there has been a 6% drop in the USD/AUD exchange rate which isn't good for profits.

BUB Price at posting: 13.0¢ Sentiment: Hold Disclosure: Held
4 Upvote

0 Great analysis

Reply

Top Stories

Listen: HotCopper Wire Podcast 013 - They changed the IPO rules (and that's a good thing)

ASX Market Close: Bourse spins in circles as Israel-Iran conflict weighs | June 17, 2025

MEM

Many are concerned about global falling birthrates. This diverse stock has solutions

RCE

Recce locks in $30M to boost commercialisation across ASEAN region

VBX Ltd jumps 15% on ASX debut as newest Oz bauxite player

First 2 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

(20min delay)
Last 15.5¢		Change -0.015(8.82%)		Mkt cap ! $138.4M

Open	High	Low	Value	Volume
16.5¢	16.5¢	15.5¢	$487.1K	3.089M

Buyers (Bids)

No.	Vol.	Price($)
9	551384	15.5¢

Sellers (Offers)

Price($)	Vol.	No.
16.0¢	1177091	13

View Market Depth

No.	Vol.	Price($)
8	526384	0.155
29	1258215	0.150
17	2427428	0.145
14	390546	0.140
10	878813	0.135

Price($)	Vol.	No.
0.160	1177091	13
0.165	1089318	14
0.170	3617650	38
0.175	1259821	18
0.180	602989	21

Last trade - 16.10pm 17/06/2025 (20 minute delay)

BUB (ASX) Chart

My concern with Bubs is they haven't re confirmed in the last...

Listen: HotCopper Wire Podcast 013 - They changed the IPO rules (and that's a good thing)

ASX Market Close: Bourse spins in circles as Israel-Iran conflict weighs | June 17, 2025

Many are concerned about global falling birthrates. This diverse stock has solutions

Recce locks in $30M to boost commercialisation across ASEAN region

VBX Ltd jumps 15% on ASX debut as newest Oz bauxite player

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

My concern with Bubs is they haven't re confirmed in the last...

Top Stories

Listen: HotCopper Wire Podcast 013 - They changed the IPO rules (and that's a good thing)

ASX Market Close: Bourse spins in circles as Israel-Iran conflict weighs | June 17, 2025

Many are concerned about global falling birthrates. This diverse stock has solutions

Recce locks in $30M to boost commercialisation across ASEAN region

VBX Ltd jumps 15% on ASX debut as newest Oz bauxite player

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News