Pinned valuation:
This is my first post on Strawman, so please be gentle. As you can see from my Strawman portfolio, I am in a learning phase :)
Over the last couple of months, I have been building a workflow and toolchain to develop investment thesis documents I can understand and use.
I use a NotebookLM notebook per stock to collect data, facts, and opinions, and then use the Notebook as a BA to answer questions from my thesis Analyst, Claude AI. I do this to try to ensure that Claude does not have to compress the chat and lose context because it has too many documents and data loaded. If the thesis analyst needs some data gaps filled, it provides me with a prompt to enter into the Notebook, and I either get the answer or look for the data to get it. So I am the BA's assistant
Workflow is:
- Collect the data and load up the Notebook
- Run a data completeness check prompt that evaluates data coverage
- Run 4 prompts to get data on
- Structure, Financials & Contracts
- Management Statements, Strategy & Track Record
- Ownership, Governance & Alignment
- Analyst Views & Market Context
- Run the Claude prompt with a template to ensure a repeatable process and output. Typically 3 cycles in the prompt, sometimes more if I miss data
- No data for the first cycle
- Add 4 outputs from the Notebook next
- Add missing data if available to improve data coverage
I have a Claude Max Plan and Google AI Pro plan
The Transcript from this week's call filled a number of data gaps I had.
Keen to understand whether this is of value or whether I have confused my AI assistants and myself.
Summary
EYE is a pre-profit ASX micro-cap medtech with a differentiated surgical device (iTrack Advance) in the growing canaloplasty segment of glaucoma surgery. The company is on a clear trajectory toward profitability: 6 consecutive halves of US sales growth at ~40% CAGR, 70% gross margins, 75% spare manufacturing capacity (confirmed near-zero capex to scale), and group EBITDA breakeven guided for H2 FY26. At 1.4x EV/LTM revenue, the stock trades at a massive discount to every relevant peer. The Strawman CEO call (16 Feb 2026) strengthened the thesis by confirming: (1) US ASP ~$1,000+ with all stakeholders economically aligned, (2) capacity expansion is labour-only with no material capex, (3) VIA 360 competitor does not have a glaucoma indication, and (4) AlphaRET partner structure would be non-dilutive. The bear case is a cash crunch and dilutive raise if breakeven slips — the CEO's indirect answer on capital sufficiency means this remains the #1 risk. The probability-weighted EV of A$0.35 implies ~119% expected return from current levels.
The thesis doc is quite long but the valuation is based on scenarios as per below. I am happy to share the lot to test out my workflow but maybe better in the AI discussion.
Scenario Analysis
Bear Case 1 — "Cash Crunch & Dilution" (15%)
Sales growth decelerates to <15% in H2 FY26. Opex doesn't flex. Cash falls below A$2M → forced placement at ~A$0.10-0.12. Target: A$0.08-0.10.
CEO gave an indirect answer on capital sufficiency during the Strawman call — cited ASX formula compliance rather than expressing direct confidence. This remains the #1 thesis risk.
Bear Case 2 — "US Growth Stalls" (15%)
RPR peaks. New surgeon acquisition slows. Competitors respond. Revenue grows but margin leverage doesn't materialise. Target: A$0.12-0.14.
Reduced from 20% post Strawman call: VIA 360 confirmed not indicated for glaucoma; capacity expansion confirmed near-zero capex; reimbursement economics confirmed healthy for all stakeholders.
Bear Case 3 — "Reimbursement / Regulatory" (5%)
Medicare cuts reimbursement for canaloplasty; or EU MDR blocks European access. Target: A$0.06-0.10.
Reimbursement economics (doctor/facility/device) are healthy and aligned for all parties, which provides some political protection against cuts.
Base Case — "Execution on Guidance" (42%)
FY26 revenue A$35-36M. EBITDA breakeven H2 FY26. FY27 revenue ~A$45M at 25% growth. No capital raise required. Target: A$0.35-0.45 at 2.5-3.0x P/S.
Base case logic: EV at 2.75x A$45M = A$124M → ~A$0.44/share.
Bull Case 1 — "Profitability Inflection + Re-Rate" (17%)
FY27 revenue >A$50M. EBITDA A$5-8M positive. Analyst coverage expands. Target: A$0.55-0.75 at 3.5-4.5x.
Strengthened by confirmed near-zero capex scaling; AlphaRET non-dilutive structure; 7% US share = A$60M as management aspiration.
Bull Case 2 — "China Upside" (10%)
iTrack Advance drives US$5-10M annual in China (3.6M cataract surgeries/year TAM). Target: A$0.60-0.80.
Bull Case 3 — "Drug Delivery / M&A" (5%)
Licensing deal or takeover. At ~A$46M EV for A$32M revenue at 70% GM with 100+ patents — objectively cheap on a take-private basis. AlphaRET partner structure confirmed as subsidiary-level equity (non-dilutive to EYE shareholders). Target: A$0.80-1.50+ (speculative).
Data Gaps and open Questions
Kill Switches (what breaks the thesis)
- Dilutive capital raise at >20% discount — placement below A$0.13 signals cash crisis
- US quarterly revenue turns negative YoY — core thesis is US growth
- Medicare reimbursement rate cut for canaloplasty — structural demand impairment
- MD or Exec Chairman sells on-market — insider signal of thesis failure
@mickak38 I like that your scenarios span a wide range of outcomes (including downside), as I think that's the true uncertainty here.
Given that this market category is relatively mature, and highly contested, and that the clinical evidence for iTrack is relatively weak (on a comparative basis), to be frank, I can't see the higher bull cases ever being in prospect.
I'm in the process of cranking the handle now, too.
@mickak38 I like that you've written down "what I still don't know" and "what breaks the thesis". I often have a vague dot point list of "risks", but your framing is much tighter, less room for thesis creep and confirmation bias (not that you're not allowed to change your mind). I think I'll start using that moving forward.