Q: What do you think about ABCL? It has fallen a lot... and has lots of cash. Would you buy here? WHat are its growth prospects/metrics?
5i Research Answer:
ABCL continues to be ignored by investors as it tries to rebuild its revenue. Cash is $640M (net) but cash flow is still negative ($44M last year). After falling off a cliff, sales growth is back, but from a much lower level. Sales were 7% better than estimates last quarter but the loss reported was 36% worse than expected. Insiders own 21%. It is still winning some business and getting licence payments, but with a revenue base of only $48M expected this year it is very expensive, even after considering its cash. With losses and negative cash flow expected to continue, at this time we would have no interest.