6/11/24 - $strm - interesting, but ~25c maybe k? avoid 4 now.6/11/24 - vrockstar - NASDAQ:STRM - interesting niche biz here providing data-related solutions to the healthcare rising tide. 25 mm cap and 10 mm debt - yuck first of all to the debt, but whatever (and it is relevant). looks like revenue growth isn't great - but when you dig in there's a change that seems to have been made to account for revenue and COGS differently - so look at gross profit for now esp when thinking about the '24 bogey and how this factors into valuation:
so here i clearly have a small/ sub scale software that's growing gross profit perhaps 15-20% at best. still not profitable. so first point - we're half (at best) rule of 40, so if i was just going off the new proforma revenue number, which the market is likely to do, at 20 mm let's say - i can't pay more than maybe 2x if my consideration set is everything (for me it is). if i'm in industry, have a more nuanced POV and believe in what's happening here under the financials (more on this below), maybe 3x - i'm at 60.
so while i don't know the company well - i'm adding it to my long medical-related watchlist - if i can pay 5x gross profit on my favorite name NYSE:YOU on adjusted enterprise value - do i pay 2x-3x on this? maybe sure that's 25-30 mm - which is where the stock sits. BTW fam - that's not obvious math - that's me trying to be generous. and when you consider the toxic 10 mm of debt which is 1/3 of the capital stack in a co that clearly will need to keep diluting to growing... this is a tough one to own
the conclusion here: i'm not tempted to own it, to play EPS or even to chase it if it's up (and especially if it really starts runnin). the risk/reward is NOT there unless something fundamentally changes/ inflects. this isn't the type of stuff that's going to turn on a dime either - my sense is this is long cycle sales stuff esp in a high rates environment where hospitals are getting more gutted by the day on expenses.
maybe you could buy for a quarter 25c? but at that point/ if/ as we get there, i'm sure there's other stuff we'd probably want to own more and have merit to see incremental flows before this does. perhaps it's a take out. sure. but i don't just park in stocks like this to cross my fingers and hope. i'd just avoid it for now.
-V
STRM trade ideas
$STRM Signs New Contract for Streamline Health® eValuator™Large Southwestern Health System Signs New Contract for Streamline Health® eValuator™
$STRM today announced it has signed a contract with a 1,300-bed, Epic EMR-based health system in Arizona. The healthcare provider will use eValuator’s cloud-based automated pre- and post-bill coding analysis technology to help improve revenue integrity for their inpatient and outpatient services.
finance.yahoo.com
Long term? P/E 4.29 EPS (ttm) 0.19 Insider Own 1.90% Shs Outstand 19.18M Perf Week -10.43%
Market Cap 15.46M Forward P/E - EPS next Y -0.11 Insider Trans 0.00% Shs Float 15.06M Perf Month -10.41%
Income 3.80M PEG 0.29 EPS next Q -0.04 Inst Own 46.60% Short Float 0.09% Perf Quarter -30.49%
Sales 24.00M P/S 0.64 EPS this Y 143.90% Inst Trans -1.03% Short Ratio 0.24 Perf Half Y -45.89%
Book/sh 0.49 P/B 1.65 EPS next Y 35.30% ROA -5.70% Target Price 3.17 Perf Year -40.71%
Cash/sh 0.17 P/C 4.83 EPS next 5Y 15.00% ROE -20.40% 52W Range 0.76 - 2.19 Perf YTD -52.29%
Dividend - P/FCF 4.55 EPS past 5Y 18.00% ROI 22.70% 52W High -63.18% Beta 0.05
Dividend % - Quick Ratio 0.70 Sales past 5Y 0.50% Gross Margin 61.80% 52W Low 5.81% ATR 0.08
Employees 116 Current Ratio 0.70 Sales Q/Q -10.20% Oper. Margin -6.20% RSI (14) 38.41 Volatility 9.09% 8.47%
Optionable No Debt/Eq 0.43 EPS Q/Q -37.70% Profit Margin -8.50% Rel Volume 0.07 Prev Close 0.83
Shortable Yes LT Debt/Eq 0.37 Earnings Dec 11 AMC Payout - Avg Volume 54.63K Price 0.81
Recom 2.70 SMA20 -9.63% SMA50 -18.08% SMA200 -40.26% Volume 3,903 Change -3.31%
