Nice write up with a lot of great information!! The red flags are valid points, I am thinking 1,2 and 3 are more temporary because the company is new in the market.
My thesis: unique product for specific group of people without any big competitors, high ROIC due to light asset business mode.
Their product is mainly targeted for vegetation, which is about 1-2M 2% of UK population. I am not aware big competitors are targeting this segment. The products are high quality with good reviews.
If the demand (consumer does not leave and their taste is not change) is there, the business will go back to normal after macro recession.
Based on that: my downside case is a little different from yours. I would give 30M revenue + 15% operating margin , since the main item (Wages and Salaries) of expense is flexible cost, manager team could optimize it based on the condition.
By the way: I am also newbie and willing to know more.
I'm not sure that the product is unique, but there are no comparable large competitors in this niche. As for downside scenario, yes - salary expense can be tamed but only to some extent.
My current plan is to continue watching, would like to see at least the next 6M results (mainly margins and store openings).
Nice write up with a lot of great information!! The red flags are valid points, I am thinking 1,2 and 3 are more temporary because the company is new in the market.
My thesis: unique product for specific group of people without any big competitors, high ROIC due to light asset business mode.
Their product is mainly targeted for vegetation, which is about 1-2M 2% of UK population. I am not aware big competitors are targeting this segment. The products are high quality with good reviews.
If the demand (consumer does not leave and their taste is not change) is there, the business will go back to normal after macro recession.
Based on that: my downside case is a little different from yours. I would give 30M revenue + 15% operating margin , since the main item (Wages and Salaries) of expense is flexible cost, manager team could optimize it based on the condition.
By the way: I am also newbie and willing to know more.
Glad that you found it helpful!
I'm not sure that the product is unique, but there are no comparable large competitors in this niche. As for downside scenario, yes - salary expense can be tamed but only to some extent.
My current plan is to continue watching, would like to see at least the next 6M results (mainly margins and store openings).