Akoustis Technologies, Inc.

AKTS Details

Akoustis Technologies, Inc. (NASDAQ: AKTS) is a rapidly growing commercial product company focused on developing and manufacturing ground-breaking radio frequency (RF) filter solutions for the wireless industry, utilizing its patented MEMS-based Bulk Acoustic Wave (BAW) technology and a unique manufacturing process flow (also known as XBAW) for filters used in RF Front-End (RFFE) applications.

Latest News:

• Winning Five New Wi-Fi Designs: On January 31, 2022, AKTS stated that it had secured five new Wi-Fi design wins from multiple clients, all of which are planned to ramp up production and ship this calendar year. The winners comprise four designs using W-Fi 6E and one using Wi-Fi 6 XBAWTM filters. Akoustis has won thirteen Wi-Fi design awards, including eight for Wi-Fi 6E and five for Wi-Fi 6. These wins come on top of AKTS existing diplexer partnership with a tier-1 PC SoC manufacturer presently developing for the computer sector.

Q2FY22 Results:

• Growth in Topline: The company reported a sharp uptick of 1.81x in revenues to USD 3.67 million in Q2FY22 (ended December 31, 2021) compared to USD 1.31 million in Q2FY21, attributable to an increase in RF product revenue which comprises revenue from sales of RFM Integrated Device, Inc (RFMi) products.
• Increase in Net Losses: However, AKTS witnessed an increase in net losses to USD 15.26 million in Q2FY22 vs. USD 11.91 million in Q2FY21.
• Healthy Balance Sheet: As of December 31, 2021, the company had a cash balance of USD 67.47 million with no outstanding debt.

Key Risk:

• Customer Concentration Risk: AKTS derives the majority of its revenue from a limited number of customers. The company's largest clients accounted for 47% and 19% of revenues in FY21 and FY20, respectively. As a result, the loss of any one of such clients could harm the company's financials.
• Reliance on Third-Party Suppliers: AKTS relies significantly on third-party suppliers for raw materials and component requirements in its manufacturing operations. As a result, any substantial issue experienced by the suppliers might cause a delay in the final product's availability, harm marketing efforts, and reduce revenue.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation:

AKTS stock price has fallen 65.75% in the past twelve months and is currently at the lower-band of the 52-week range of USD 4.58 to USD 18.63. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 6.87.

Considering the company's growth prospects, strong balance sheet, won five new wi-fi designs, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 5.62, up 3.88% as of February 07, 2022, 01:42 PM ET.

Three-Year Technical Price Chart (as on February 07, 2022, at 01:42 PM ET). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above. 

TFF Pharmaceuticals, Inc.

TFFP Details

TFF Pharmaceuticals, Inc. (NASDAQ: TFFP) is an early-stage biopharmaceutical company focused on development and commercialization novel therapeutic solutions for treating pulmonary diseases using its proprietary Thin Film Freezing (TFF) technology platform. Its leading product candidates are Voriconazole Inhalation Powder (TFF VORI) and Tacrolimus Inhalation Powder (TFF TAC). TFFP does not currently have a commercial product, but it is working with current partners to further its projects and forming new license arrangements with major pharmaceutical companies.

Product Pipeline (Source: Company Website)

Latest News:

• Niclosamide Phase 1 Study Enrollment: On January 27, 2022, TFFP stated that enrollment in its Phase 1 clinical trial of a dry powder formulation of niclosamide, an antiviral therapy that could treat COVID-19 and other respiratory viral infections, had reached 40 healthy individuals. Niclosamide is a Potent SARS-CoV-2 Inhibitor that inhibits multiple variants. Complete safety data is expected by the end of the Q1FY22.

9MFY21 Results:

• Grant Revenues: TFFP has not reported any commercial operations. However, it had a grant revenue of USD 76.17 thousand during 9MFY21 (ended September 30, 2021).
• Increase in Net Losses: It witnessed an increase in net losses to USD 20.99 million during 9MFY21 vs. USD 12.67 million during 9MFY20.
• Decent Balance Sheet: As of September 30, 2021, the company had cash and cash equivalents of USD 44.72 million with no outstanding debt.

Key Risks:

• Reliance on Patent Rights: The University of Texas at Austin (UT) granted TFFP patent rights, which are the foundation of its total business. TFFP is required to pay royalties and milestone payments and adhere to certain covenants and commitments under the patent licence agreement. Noncompliance with these criteria may result in contract termination, putting the company's operations in jeopardy.
• Regulatory Risk: The success of the three TFF product candidates is essential to TFFP's growth prospects. It has invested a significant amount of money in medication development. As a result, if it cannot obtain marketing authorization or build an effective production and distribution structure, its operations may suffer.

Outlook:

• FY22 Outlook: As per TFFP's Q3FY21 press release, the Phase 2 programs for inhaled voriconazole and inhaled tacrolimus powder will commence with an interim data analysis, with datasets expected to be finished by mid-2022. It will begin seeking license partners in Q1FY22 to commercialize its assets eventually. By the end of FY21, the company expects to have made substantial progress toward developing its Phase 2 clinical trial of inhaled tacrolimus powder.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation:

TFFP stock price has fallen 67.16% in the past twelve months and is currently leaning towards the lower-end of its 52-week range of USD 5.09 to USD 20.54. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 7.20.

Considering the significant correction in the stock price in the past twelve months, debt-free company, strong product pipeline, completion of enrollment for Phase 1 study of Niclosamide,  current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 5.81, up 3.38% as of February 07, 2022.

Three-Year Technical Price Chart (as on February 07, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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