Hyliion Holdings Corp

HYLN Details

Update on Business Combination with Tortoise: Hyliion Holdings Corp (NYSE: HYLN) provides electrified powertrain solutions for commercial vehicles. The market capitalization of the company as on 07 January 2021, stood at ~$2.73 billion. The strategic combination between Hyliion Inc. and Tortoise Acquisition Corp. was completed on October 1, 2020, and the combined entity was renamed as ‘Hyliion Holdings Corp’. The merger yielded ~$520 million in net proceeds to HYLN.

Redemption of Public Warrants: In a recent update, the company announced the exercise of the Public Warrants that expired on December 30, 2020. Under this transaction, HYLN received ~$142 million in cash proceeds on exercise of Public Warrants for ~12.5 million shares of common stock.

Q3FY20 Update: During the quarter, the company installed eight hybrid electric units for four fleet-based customers. It also made developments toward commercialization of its Hybrid and Hypertruck ERX solutions for the Class 8 truck market. The company did not generate any revenue in the given quarter. It made a loss of $2.77 million, compared to a profit of $0.73 million in Q3FY19. The company exited the quarter with a cash balance of $7.56 million, with long-term debt amounting to $4.13 million.

Q3FY20 Financial Results (Source: Company Reports)

Outlook: HYLN is positive on its prospects, after the strategic combination with Tortoise and is focused to position the company for long-term growth by capturing the market for the electrification of class 8 vehicles.

Stock Recommendation:  The company is anticipating traction for its solutions in the near-term, and is planning to develop a scaled infrastructure to take advantage of opportunities in the ~$800 billion market. HYLN gave a negative return of ~6.47% in the past one month. The stock of HYLN is trading below its average 52-week trading range of $ 58.66-$ 9.50. On a technical front, the stock of HYLN has a support level of $15.49 and a resistance level of $20.10. Considering the current trading levels, decent outlook from the strategic business combination, decent liquidity position and notable development towards commercialization of its products, we recommend a ‘Buy’ rating on the stock at the closing price of $ 17.78, up by 9.69% as on January 7, 2021.

HYLN Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Selecta Biosciences, Inc.

SELB Details

Orphan Drug Designation for MMA-101: Selecta Biosciences, Inc (NASDAQ: SELB) is a biotechnology company using its platform to develop tolerogenic therapies, that reduces unwanted immune responses. The market capitalization of the company as on 07 January 2021, stood at ~$351.09 million. In a recent update, the company has announced that AskBio and SELB have received orphan drug designation for MMA-101 to treat Methylmalonic Acidemia from the USFDA.

Q3FY20 Financial Update: During the quarter, the company reported top-line data from the Phase 2 Compare trial of SEL-212. SELB reported revenues of $4.6 million during the period, with $4.3 million recognized under the license agreement with Sobi. The company did not generate any revenue during the pcp. There was a net loss of $9.7 million in Q3FY20, compared to a loss of $12 million during Q3FY19. The company ended the quarter with a cash balance of $146.26 million and a long-term loan payable of $24.58 million.

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: The reporting of top-line data from the Phase 2 Compare trial during Q3FY20, reflected the scope of the company’s ImmTOR platform. SELB also started the Phase 3 Dissolve program in a partnership with Sobi.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months

Stock Recommendation: The company will continue to focus on developing its pipeline with its gene therapy programs in MMA and OTC deficiency, and its enzyme program in IgA nephropathy. SELB gave positive returns of 68.39% in the past three months and 47.05% in the past nine months. The stock of SELB is trading above its average 52-week trading range of $ 4.83-$ 1.42. On a technical front, the stock of SELB has a support level of $2.9 and a resistance level of $3.8. We have valued the stock using an EV/Sales multiple-based illustrative relative valuation and have arrived at a target price with a correction of low single-digit (in % terms). For the purpose, we have taken peers such as Horizon Therapeutics PLC (NASDAQ: HZNP), Merck & Co Inc (NYSE: MRK), Global Blood Therapeutics Inc (NASDAQ: GBT), to name a few. Considering the steep price movements in the past months, and current trading level, we suggest investors to book profit and give a ‘Sell’ rating on the stock at the closing price of $3.25, up by 2.85% as on January 7, 2021.

SELB Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.