GREY:XEBEQ - Post by User
Post by
retiredcfon Dec 21, 2021 9:32am
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Post# 34249923
Year End Summary
Year End Summary Over the past year, shares of XBC have seen significant negative momentum on the back of inconsistent margins, and negative impacts of the legacy contract. A buy case can indeed be made here, especially from such lower valuations as before. The sector outlook is strong, and given the negative sentiment, new contracts would likely help. Additionally, if margins do improve, investors will afford it at a higher valuation. The balance sheet remains strong, but margin improvement may take longer than expected. There are better names to own, but valuation vs potential profile is noteworthy here. Trading at 2.0x forward sales, sales are expected to grow at a CAGR of 20.5% over the next five years, and earnings are expected to turn positive in 2023. Over the next few quarters, we need to see improvement in sales, cash flow, margins, and general execution. This should be matched with an improvement in stock momentum for us to get excited again.
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