Hi there....plenty!
We've answered several questions on CloudMD this week - here are some snippits and i conclude with my thoughts on yesterday's trading halt.
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In relation to earnings:
"I would say today's results do nothing to change my opinion on the stock. We aren't traders and one quarter of earnings does not make, or break, an investment thesis. Today's results actually missed on the top and bottom lines, and some investors may be disappointed. However, they were strong results nonetheless. Given their clinics suffered from closures as a result of COVID-19, it was not surprising to see QoQ drop in revenue. Those who follow the company had an inclining that this quarter was going to be their weakest of the year.
If they close on the the 4 acquisitions they announced post-quarter (all made in Aug), the third and fourth quarters are shaping up to be very strong. We are looking at forward revenue run rate of approximately $23 million. At today's market cap, that is a forward p/s ratio of only 7.3 which is pretty cheap. This is especially true when you consider they have 13 million in the bank and are likely to make more acquisitions this fall.
I have no clue how the market will react tomorrow but if it dips, I'd consider it a buying opportunity. It would also not surprise me if it dipped since it has been in overbought territory for about a week now (14-day RSI of 81) and is due for a short-term pullback. Regardless, long-term CloudMD is a strong virtual health leader."
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On our general opinion:
"We are big fans of CloudMD. It is operating in a space (virtual health) that is experiencing considerable growth. There are a few players in the industry, but CloudMD is quickly establishing itself as a rising start. Oft compared to WELL Health technologies (WELL), one big differentiator between the two companies is that CloudMD has made moves south of the border. This opens up its target market considerably.
At one point, it was trading at a steep discount to WELL, but it has since closed the gap. It is now trading at ~16 time sales (in line with WELL) but that ratio drops considerably when looking at next year's estimates. On a forward basis, DOC is trading at only 3.5 times sales (WELL is at 10.71x) which is cheap. Despite the current price increase, IMO there is still plenty of room to grow.
The company is scheduled to release quarterly results on Aug 31. Be careful here, with companies like DOC, the stock price tends to be highly volatile around earnings. A beat can send its stock price soaring, a miss can send it crashing. Expectations are already lofty, so it will need to deliver in a big way on Monday. As always, we recommend averaging into positions - especially around earnings. This might mean taking half a position before, and half after."
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Here is some new commentary in response to yesterday's share halt:
The company is raising $13 million at $1.38 per share - I saw this coming. Given the company's run-up, it was a no brainer. For those panicking about the fact it is well below market price, it is still above last Friday's close. Remember, these deals aren't made overnight. Raising money after big price appreciations is a strong move by high growth companies. It is a staple and a strategy employed by all the big players - think SHOP does it once or twice a year, as does TSLA who just announced one yesterday after its big price spike.
This is normal and is a way for them to raise funds as they don't have access to the debt necessary to fund growth prospects. It is likely that the price will consolidate around this level before the next leg up.
Mat
(Of note I am long DOC and WELL)