POSaBIT Systems (POSAF), mcap=$104m, price $0.75 vs $0.75

POSAF pitch:
– Provider of point-of-sale software and payment systems to marijuana dispensaries.
– A secular growth story with revenues doubling YoY.
– The business would be profitable today if it did not invest in growth.
– A favorable licensing deal was signed in the summer of 2022 with royalty fees dropping right to EBIT.
– POSAF is well-positioned to capitalize on industry downturns and acquire bolt-on assets at reasonable valuations.
– Set to benefit from the continued marihuana legalization across more states.

POSAF valuation:

– Trades at 2-2.4x their EV/annualized sales exiting Q4 ($48m-$60m).
– Set to reach $70m in annualized sales by the end of 2023.

Exp. gain: Not specified.

Full write-up (free guest account required):