Taglich Brothers Publishes First Coverage Report on Cosmos Health with a Price Target of $4, a Nearly Five-Fold Increase from Current Share Price
- Speculative Buy rating and $4.00 price target from Taglich Brothers.
- Expected revenue of $64 million in FY 2024.
- Tangible book value per share of $3.09, suggesting undervaluation.
- Trailing Price-to-Sales multiple of 0.2X, below industry average.
- Anticipated growth from Cana Laboratories and generic drug portfolio.
- Potential revenue contribution of $30 million from Cana by 2025.
- None.
Insights
The Speculative Buy rating and the substantial price target set by Taglich Brothers for Cosmos Health's common stock suggest an optimistic outlook on the company's financial health and growth prospects. The valuation metrics, such as the Price-to-Book ratio of 0.27X and the Price-to-Sales multiple of 0.2X, are significantly lower than the sector averages. These figures indicate that the stock may be undervalued, especially considering the tangible book value per share is nearly four times higher than the current share price.
The forecasted revenue growth for FY 2024, which is expected to be 25% higher than previous years, reflects the positive impact of strategic acquisitions such as Cana Laboratories and the generic drug portfolio. The anticipated reduction in the full-year loss per share due to operating leverage from synergies also suggests improved profitability in the near term. However, investors should be cautious of the execution risks and the potential dilution from the exercise of warrants, which could affect the stock's performance.
The healthcare sector is experiencing a push towards vertical integration, which Cosmos Health is capitalizing on. This strategy can create efficiencies and reduce costs, contributing to the company's anticipated revenue growth. The report's anticipation of substantial growth due to the company's evolution into a vertically integrated organization aligns with current industry trends of consolidation.
Moreover, the report highlights the potential for significant growth beyond 2024, especially with Cana's expected contribution of at least $30 million of additional revenue by 2025. This suggests that Cosmos Health is not only focusing on immediate growth but is also strategically positioning itself for long-term expansion, particularly with the upcoming launch of a generic diabetes drug in Europe, which could tap into a large and growing market.
The valuation of Cosmos Health appears to hinge on the successful integration of Cana Laboratories and the launch of new products, such as the generic diabetes drug. The pharmaceutical industry is highly competitive and the success of new drugs is critical. The company's adjusted EBITDA improvement will be a key indicator of its ability to manage costs and generate profits from its expanded product lines.
The trailing Price-to-Sales multiple of 0.2X is particularly noteworthy, as it is well below the average for the medical distribution and drug manufacturing sectors. If Cosmos Health can sustain its revenue growth and improve margins, there is potential for a re-rating of the stock closer to industry norms. However, the market will likely require evidence of sustained profitability and successful product launches before a significant revaluation can occur.
CHICAGO, IL / ACCESSWIRE / February 21, 2024 / Cosmos Health Inc. ("Cosmos Health" or the "Company'') (NASDAQ:COSM), a diversified, vertically integrated global healthcare group engaged in innovative R&D, owner of proprietary pharmaceutical and nutraceutical brands, manufacturer and distributor of healthcare products, and operator of a telehealth platform, announced today that Taglich Brothers, Inc. ("Taglich Brothers") published its first coverage report on the Company's common stock.
The report, published on February 20, 2024, by analyst Howard Halpern, assigned a Speculative Buy rating and set a 12-month price target of
A summary is available in the Taglich Brothers website section dedicated to Cosmos Health, and the detailed report can be accessed here.
Greg Siokas, Chief Executive Officer of Cosmos Health, stated: "We are pleased that Taglich Brothers has published its inaugural coverage report on our common stock. As I have consistently stated, I believe our common stock is undervalued, given our accomplishments and growth prospects. In line with this, it's gratifying to see Taglich Brothers set a price target nearly 5 times higher than our current share price, underscoring the very reason I am also buying shares in the open market. We hope for even greater analyst coverage over time, which should further elevate awareness and highlight the intrinsic value of Cosmos."
Key highlights of the Taglich Brothers coverage report include:
- Price target of
$4.00 per share implying the share price could increase nearly five-fold over the next twelve months. - Tangible book value per share of
$3.09 , nearly four times higher than the current share price, suggesting a Price-to-Book ratio of 0.27X. - Substantial growth is anticipated due to the Company's evolution into a vertically integrated global health organization.
- FY 2024 revenue is expected to reach
$64 million , approximately25% higher than FY 2022A and FY 2023E, reflecting, among others, the benefits from a full year's contribution from Cana Laboratories ('Cana') and sales from the Company's recently acquired portfolio of generic drugs. - Trailing Price-to-Sales multiple of 0.2X is significantly below the average price-to-sales multiple of 2.2X for companies in the medical distribution and drug manufacturing sectors.
- Applying a price-to-sales multiple of 1.4X to the 2024 sales per share forecast of
$3.50 , and accounting for execution risks and potential dilution from the exercise of warrants, results in a year-ahead price target of approximately$4.00 per share. - Valuation is expected to improve as Cosmos Health reports revenue growth, narrows operating losses, reduces cash burn, and improves adjusted EBITDA.
- The full-year loss per share is anticipated to decrease significantly due to substantial operating leverage from synergies with Cana and the associated increase in pharmaceutical production.
- Moving beyond 2024, significant growth is anticipated from Cana, with the potential to contribute at least
$30 million of additional revenue by 2025 through the relaunch of its proprietary products, contract manufacturing services, production of new internally developed products, as well as the launch of a generic diabetes drug in Europe.
About Cosmos Health Inc.
Cosmos Health Inc. (Nasdaq:COSM), incorporated in 2009 in Chicago, Illinois, is a diversified, vertically integrated global healthcare group. The Company owns a portfolio of proprietary pharmaceutical and nutraceutical brands, including Sky Premium Life®, Mediterranation®, bio-bebe® and C-Sept®. Through its subsidiary Cana Laboratories S.A., licensed under European Good Manufacturing Practices (GMP) and certified by the European Medicines Agency, it manufactures pharmaceuticals, food supplements, cosmetics, biocides, and medical devices within the European Union. Cosmos Health also distributes a broad line of pharmaceuticals and parapharmaceuticals, including branded generics and OTC medications, to retail pharmacies and wholesale distributors through its subsidiaries in Greece and the UK. Furthermore, the Company has established R&D partnerships targeting major health disorders such as obesity, diabetes, and cancer, and focuses on the R&D of novel patented nutraceuticals, specialized root extracts, proprietary complex generics, and innovative OTC products. Cosmos Health has also entered the telehealth space through the acquisition of ZipDoctor, Inc., based in Texas, USA. With a global distribution platform, the Company is currently expanding throughout Europe, Asia, and North America, and has offices and distribution centers in Thessaloniki and Athens, Greece, and in Harlow, UK. More information is available at www.cosmoshealthinc.com, www.skypremiumlife.com, www.cana.gr, and www.zipdoctor.co, as well as LinkedIn and X.
Forward-Looking Statements
With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise, include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could", are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements, involve unknown risks and uncertainties that may individually or materially impact the matters discussed, herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company's ability to raise sufficient financing to implement its business plan, the impact of the COVID-19 pandemic and the war in Ukraine, on the Company's business, operations and the economy in general, and the Company's ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company's filings with the SEC, which are available at the SEC's website (www.sec.gov). The Company disclaims any intention or obligation to update, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Disclaimer
All research issued by Taglich Brothers is based on public information. The Company does not undertake the responsibility to advise you of changes in figures or in their views. The Company pays a fee of
Investor Relations Contact:
BDG Communications
cosm@bdgcommunications.com
+44 207 0971 653
SOURCE: Cosmos Health Inc.
View the original press release on accesswire.com
FAQ
What rating and price target did Taglich Brothers assign to Cosmos Health (COSM)?
What is the expected revenue for Cosmos Health in FY 2024?
What is the tangible book value per share for Cosmos Health?
What is the trailing Price-to-Sales multiple for Cosmos Health?
What are the key growth drivers for Cosmos Health mentioned in the report?
