Jason Donville Kraken Robotics Inc. PNG-X BUY Jan 06, 2025

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Cash position is strong despite revenues falling in 2020 compared to the large order they received in the prior year. Margins have improved. It continues to secure orders. High risk but doing many things right. Unlock Premium - Try 5i Free

Software-centric sensors for underwater. Two sides: sensor and power. Military, government, research companies are potential customers. Recent US $1.5M contract. Very illiquid. Almost a double from here to the price target. Buy in thirds at $0.52, 0.45, and 0.40.

PNG reported a slight EPS beat, coming in at 1.24c, beating estimates of 1c. Revenue more than tripled on a year-over-year basis, but did miss estimates coming in at $28.01M versus forecasts of $$28.35M. Guidance for 2024 was maintained, expecting evenue between $90M to $100M and Adjusted EBITDA in the $18M to $24M range. Management mentioned that it made improvements to improve its technical and commercial depth in 2023 and made significant investments in headcount and infrastructure. PNG also subsequently reported that it received an order for more than $6M for subsea batteries that will be delivered in 2024 and 2025. Momentum continues to be strong and while this quarter was slightly below expectations on a revenue basis, PNG continues to grow at a high rate and win contracts.
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Net income rose 31% year-over-year to $2.6M. Revenue rose 67%(!) year-over-year to $22.8M. Product revenue increased 83% year-over-year driven by increased sales across key products. Adjusted EBITDA increased 79% in the quarter to $5.4M. PNG maintained its outlook for the full year 2024 expecting revenue between $90M to $100M and Adjusted EBITDA in the $18.0M to $24.0M range. This outlook is, "driven by contracts in hand and reflects strength across both our Product and Service groups addressing defense and offshore energy customers." Another very strong quarter for PNG continuing its run and the stock has hit another high today. 
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Phenomenally good performance. Now at inflection point. Seeing more and bigger contracts both on surveillance and on batteries. Hopefully this is just getting started and it doesn't get bought out before the long runway of earnings growth and share price appreciation materializes.

He owned it last year after shares jumped. It's a great business, but the 40x PE is too high and risky. That said, they are doing well.