Strong Earnings from Medexus, Donnelley Financial Solutions and NamSys
Last night, Medexus Pharma (MEDXF) reported excellent results. Revenue increased 70% y/y to $31.5MM in the quarter. While that top-line number benefitted from ~$3MM of sales that slipped from last quarter to this quarter, it was nonetheless a very positive report. Adjusted EBITDA increased to $5.1MM from a mere $700,000 a year ago.
The bigger news (we’ve covered this in past weeks) is that Medexus recently announced a licensing deal that is going to enable it to double sales by 2022.
The stock has pulled back a bit after a torrid run. I think the pullback is healthy and will set the stock up for another nice run. Longer-term, this could be a $30 stock. Buy under 7.50.
Last week, two of our companies reported earnings.
Donnelley Financial Solutions (DFIN) reported excellent results, with positives across the board:
- revenue growth of 10.5%, beating the consensus significantly;
- software solutions revenue increasing 8% y/y to $54.2MM and now represent 25.8% of total sales;
- a $50MM share repurchase authorization.
Given that the stock is up 30% since reporting earnings, I wouldn’t be surprised if it takes a breather. Nonetheless, I think significant upside remains. Buy under 25.00.
Finally, NamSys Inc. (NMYSF) reported positive full-year results with 15% revenue growth and 34% free cash flow growth. At a 15.3x free cash flow multiple, NamSys is incredibly cheap given it is a SaaS company with long-term secular tailwinds. Buy under 0.80.