HG has had a huge run, up 209% YTD and 2,200% in a year.
Let's first look at financials, just released: Year end cash was $20M. Total assets $27M. Sales $19.7K. That's $19,700, not millions. Net loss $3.1M. Operating cash flow: negative $2.5M. Shares outstanding: 339M, up from 230M in September 2024.
It is a small company that has yet to achieve commercial sales. Thus, its value is based on potential and what could happen. Are there massive markets for graphene? Absolutely. Is HG well-positioned? Certainly.
But, at $2.7 billion market cap, investors are pricing in massive growth already. It could certainly happen, but it may not happen as fast as investors expect. Dilution will occur as it grows sales and production. Things could go wrong. Commercial margins may not be as expected. Essentially, the valuation assumes a lot will go right, already. It doesn't make this a bad stock, but it makes it risky if things go wrong. HG is also being heavily promoted. Again, not always a bad thing, but it means more investors are aware of it even before it achieves real fundamental success, and sets the bar high. FOMO is also strong here, as it is with any stock up so much. Do we think it can go higher? Sure it can, since it is moving on speculation and potential and not real fundamentals yet. Could it get cut in half? Sure it could, perhaps more on bad news. So, we would classify us as 'cautious' vs concerned.