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  5. PNG: Your take on the latest results and prospects would be appreciated. [Kraken Robotics Inc.]
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Q: Your take on the latest results and prospects would be appreciated. Thanks
Asked by Robert on November 29, 2023
5i Research Answer:

PNG is a small-cap name that provides optical sensors, batteries, robotic equipment used in military and other commercial applications and is now trading at 11.4x times' Forward P/E. In the past five years, growth was solid, around 43% on average. The balance sheet is okay, with net debt of $12M and net debt/EBITDA of 1.5x. The company recently reached positive EBIT for the first time, currently generating $2.9M EBIT on the trailing twelve-month basis. Based on consensus estimates, sales are expected to grow by 30% next years. Although the size risk is there, we think the momentum in the company’s fundamentals is strong, with new contracts coming in at a faster pace. It is a long sales cycle but sales/EPS are expected to rise close to 50% next year. Insiders own ~13%. We would today consider it interesting for very aggressive small cap investors.