Inotiv (NOTV), mcap=$279m, price $10.94 vs $13.14

– Contract research organization focused on drug discovery and pre-clinical development.
– Trades at 50% discount to peers.
– In the transition period having recently acquired 10 companies increasing revenues 10x and EV 4x.
– Combined business sill underearning with 12% EBITDA margins below peers (23%) and long-term guidance (20%).
– New CEO is successfully implementing a turnaround since 2019.
– Recent stock weakness was driven by a DOJ investigation, which should have very limited implications for the business.
– 9 different insiders purchased $1.6m of stock.

– On ’23 estimates the company trades at 6x EBITDA and 0.9x revenues.
– Peers CRL, IQV, ICLR, and LH are materially higher at an average of 13x EBITDA and 2.6x revenue multiples.

Exp. gain: +50-100% upside over the next 12 months.

Full NOTV write-up (free guest account required):

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