Xebec had a clear choice to make: either grow fast and be a major player in the rng sector (with that implying temporarily sacrificing the bottom line to fuel the growth in the top line) or just please the market (also temporarily) by meeting their ebidta target but plan for no significant growth
They chose the former. Don't forget their $110-130 mil 2021 revenue target was stated before the 18 unit biostream order was in place. I am sure they have more of these multiunit biostream orders aligned. So we might be suprised regarding q3 revenues. Ans then surprised about the q4 revenues. They are now producing about 2 biostream units per month. So an additional $9 mil usd per quarter. This capacity will be increased further likely via an US based plant given that their demand is coming primarily from the US.
Ask yourself this question:
If you knew you have the demand of hundreds of biostream units per year (and increasing every year) with margins in the 20-30% range, would you just refuse all those orders to meet some stared target or would you choose to just grow capacity and sacrifice ebidta short term? We will see what revenues they achieve quarter over quarter going forward. I foresee that in the very near future their yearly revenues from biostream alone will be more than $150 mil. And then double that, also soon enough. By very near future I mean sooner than most expect it.
Look at greenlane renewables. Thei revenues in q2 were essentially unchanged compared to the previous quarter.. they have a marginally positive ebidta. They can maintain that positive ebidta indefinitely and always have the same revenues, about $12 mil per quarter, give or take... would this make it a better investment? For the past 3 months yes. For the next 3 years no.
Xebec can also achieve a positive ebidta as soon as tomorrow, if they choose not to grow at all. They also stated clearly that now all their segments outside rng (inmatec, hygear- hydrogen, cleantech service) already have positive ebidta's. So it is not a matter of achieving a positive ebidta but rather of achieving the growth needed for a booming sector..in the rng segment
We will all be very happy once the exponential growth tapers a bit down and then margins will start exponentially getting better until they reach about 30%. I know I am holding for that yo happrn. Many won't as they think this will take too long. It won't. You will see that quarter over quarter the margins will also be improving as they alteady did over the past 3 quarters.
It all depends whether you want to take advantage of holding a true growth stock. The same as Amazon, Walmart, McDonalds, Apple etc were. The nice thing with growth stocks is that you don't have to come in very early to make money. Even 10 years out from the initial growth start those companies are still growing. People who started investing in walmart 10 years after their ipo still made hundred times the money. Same with Microsoft. But people who invested from the very beginning made an order of magnitude more.
So, rather than complaining about the current situation, please come back in 10 years and start investing then. The story will be derisked and the growth pattern will continue for many more years. Just don't complain then that instead of being a penny stock, xebec will already be at $30-50 a share. You will still make money even then.