RE:Global Automotive OEM
Not very often is a question asked by a subscriber . Keep in mind , in this part of the site it's a question & answer format for multiple traded equities and Is used as only one source of research in portfolio risk management and construction.
It's in the same ball park of other analysts so don't shoot the messenger ....
Question:
Hoping for your thoughts and input on this junior tech and clean tech company (EXRO:CA) It seems they are on the cusp of big things, with ongoing contracts signed for their products, including Linamar recently and, and another global auto OEM still under a non disclosure agreement. Would now be a good time to buy in. Thank you!
Answer:
EXRO makes self-optimizing motors and generators, and the stock is up 55% in the past year, bringing market cap to $381M. But it has minimal sales ($11M expected this year), not much cash (net debt $6M) losses and negative cash flow (-$32M in the last 12 months). It is going to need more capital. Insiders own 3%. Still, the tech is interesting and has potential. The partnerships look good. It has some patents filed. We do note it recently paid a bond interest payment in shares, which highlights its relatively tight financial structure. We also note the share count has more than doubled in the past three years. Overall, there is a lot of risk here, and with market cap near $400M investors have VERY high expectations already. It is the type of stock that will trade on news, and could do well in a risk-on market. But in a market correction it might get hit hard. No doubt there is potential here, but also a lot of risk. We would prefer a bit more solid of a financial foundation before buying. "
So says 5iResearch
RangerBuck