Pinned straw:
@Parko5, problem with the acquisition argument is that unless you're an insider at the acquirer, it's difficult to know at what price and time such an acquisition is right.
That's two sell/buy back decisions you have to get right, and then timing it with unknown factor of when is it right for the acquirer.
Might be in the skill set of some here to get it right, but that's way too hard for me.
@Parko5 $PNV is an attractive acquisition target for a major medical devices firm with dermal repair focus because the product would significantly enhance the product portfolio of the acquirer.
However, the sticking point is valuation. EV/Revenue is currently 11. Acquisition multiplies for a single product, medical device firm, just profitable, with a decent addressable market and proven growth would likely be towards the upper end of 5-10x (IMHO).
So, assuming an acquisition premium of 30%, $PNV is at 14-15x. I think that’s likely too expensive for a firm like J&J which has other options in the space (e.g. $AVH, $ARX).
Of course, if revenue growth slows, and the SP follows, then $PNV could come into range.
I think $PNV is at an interesting stage now. It is hard for a single product company to make it as a business in this industry, and the slowing revenue growth - if part of a continuing trend - will need very good capital discipline because now earnings growth is going to become very important. I hope DW wakes up to that, quickly. He needs to change his tune from “it’s about growth, … I don’t care about profits”.
If he manages that successfully,$PNV can still be a successful investment case. If he doesn’t, he’s toast.
I’m not holding for an M&A case, but for earnings growth. But I need to run some sensitivities on my model to see what that looks like with an earlier revenue maturation.