I did a bit of analysis last night on RHT and have put in a...

I did a bit of analysis last night on RHT and have put in a small buy today.

I think there is long term growth here, but possibly what the x-factor missing is the fact they are so close to profit.

Once making cash as a bio or tech, you can get valued on your growth as opposed to the notional sky-high total addressable market. Anyway, the big questions will be how fast will Hepafat-AI grow and will it add to revenues? I can make a solid case to buy today if its going to triple the current revenue from the current ferri products and consulting services. So thats what Im looking for next quarterly. A start of a big jump in growth.

RHT did 12% YoY organically last half. That needs to start going hard from here. Probably more like 12% a quarter, if not faster, to really justify a value-based rereate. Im banking that the company will do that.

So some numbers:
Lets say current business can do 12% YoY in H2, that should give ~$4M in FY21 revenue. Now Hepafat has a much bigger TAM. In time (say 2 years?) Id hope that it can triple the rev of the existing business (Is this a reasonable estimate?).

So a $12M pa rev business.

Assume costs increase from $3.5M 20% to $4.2M, we get an EBITDA of $8.4M. Take tax and you have ~$6M NPAT.

Ultimately this is a tech company and if it does indeed triple its rev through Hepafat, then a 30 multiple is reasonable = MC $180M in the nearish term = 38c.

So not quite $1 yet, but if they show growth, then we will see the rerate happen.