Convalo Health International Corp (CVE:CXV) continues to be an undervalued play on demand growth for substance abuse treatment in the US, according to Mackie Research Capital.

Having given a new investor presentation from Convalo the once-over, Mackie said it does not plan to make material changes to its estimates, as it reiterated its 'buy' recommendation and 90 cent 12-month target price.

“CXV is working towards an exit revenue run rate of $80 million, which assumes the development and ramp-up of five pods. Each pod includes a detox facility, an intensive outpatient centre and lab capacity/support. The CAPEX required to develop a de novo pod is very modest (approx. $1 million), so the company has ample balance sheet capacity to finance its plan internally,” Mackie said.