STRATA Skin Sciences (SSKN), mcap=$37m, price $1.07 vs $1.04

– Microcap selling excimer laser systems for dermatologists at 3.8x fully ramped EBITDA.
– Monopoly position after last year’s acquisition of main competitor (realization of full synergies still in process).
– Recovery of dermatology practices as COVID fades.
– High gross margin on recurring sales from its growing installed base.
– Despite the dramatic increase in scale and elimination of its only competitor, SSKN trades at an 18% discount to the 2015 purchase price of its key asset.
– 35% shareholder is likely positioning the company for sale.

– EBITDA is expected to ramp up from $1.5m in ’21 to $8.5m by H2’23 driven by the conversion of the acquired install base to a recurring sales model.
– Trades at 3.8x fully ramped EBITDA.
– Medical device peers trade are at 8.4x ’23 EBITDA.

Exp. gain: +200% to $3.1/share

Full $SSKN write-up (free guest account required):

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