Biolase, Inc.

BIOL Details

BIOL Enters into an Underwriting Deal: Biolase, Inc. (NASDAQ: BIOL) is a dental laser and medical technology company that is engaged in developing, manufacturing, and marketing lasers and related products to advance the practice of dentistry and medicine. On February 5, 2021, the company entered into an underwriting agreement with Maxim Group LLC. As per the deal, the underwriters have approved to acquire 14,000,000 shares of common stock of the company at an offer price of $1.03 per share, on a firm commitment basis. The offer price will exclude underwriting discounts and commissions.  BIOL expects the gross proceeds to be ~$14.4 million.

BIOL Regains Compliance with Nasdaq Rules: On February 4, 2021, BIOL received an official notification from The Nasdaq Stock Market LLC (“Nasdaq”) that it has resumed compliance with Nasdaq's lowest bid price requisite for continued listing on the Nasdaq Capital Market. The notice suggested that, because of the closing bid price of the company's common stock having been at $1.00 per share or greater for a minimum 10 successive business days, from January 21, 2021 through February 3, 2021, BIOL has regained conformity with Nasdaq Listing Rule 5550(a)(2).

Preliminary 4QFY20 results: For 4QFY20, the company expects total revenues to be between $8.2 million to $8.5 million, representing a quarter over quarter increase of 26-31%. 4QFY20 revenues signifies two consecutive quarters of improvement, owing to sales to new customers, specialists and four different DSOs purchasing BIOL technology in the U.S. New users accounted for ~78% of sales in 4QFY20, thereby continuing a positive trend. Whereas around 40% of sales came from specialists, depicting a massive growth from the prior corresponding period. At the end of 4QFY20, the company’s cash position stood at ~$25 million. Net revenues for 3QFY20 came in at ~$6.54 million as compared to $8.65 million reported in the year-ago quarter.

3QFY20 Key Highlight (Source: Company Reports)

Stock Recommendation: The stock of BIOL gave a positive return of ~361.1% during the span of three months and 227.3% in the past six months period. The stock of the company is currently trading very close to its 52-weeks high level of $1.51. Debt to Equity ratio of the company stood at 1.17x in Sep’20 as compared to the industry median of 0.29x. On a technical front, the stock of BIOL has a support level of ~$0.68 and a resistance level of ~$1.54. On the valuation front, the stock is trading at a P/B multiple of 7.3x as compared to the industry median of 4.1x on TTM (Trailing Twelve Months) basis. Considering the spike in the stock price over past months, current trading levels, and high debt to equity ratio, we are of the view that most of the positive factors of the company have been discounted at current trading levels. Hence, we suggest investors to wait for better entry level and give an “Expensive” rating for the stock at the closing price of $1.4, up by 2.94% on 9 February 2021.

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

BEST Inc.

BEST Details

BEST Plans to Open Sortation Center: BEST Inc. (NYSE: BEST) is engaged in offering logistics and supply chain management solutions. Recently, the company announced that it plans to open a brand-new flagship sortation center in Vietnam, ahead of approaching holiday sales season. Notably, earlier, the company expanded its sortation center in Bangkok, Thailand, to meet growing customer demand in Southeast Asia.

3QFY20 Key Highlights: During the quarter, the company reported revenue of RMB8,693.3 million, a decrease of 0.6% from pcp, primarily due to decline in average selling price ("ASP") of Express business, which was partially offset by an increase in Express volume. Gross Profit for the quarter came in at RMB37.6 million, which went down 92.6% on a year over year basis, owing to lower ASP and higher costs of Express and Freight units. Net Loss in 3QFY20 came in at RMB639.5 million, against a net loss of RMB6.7 million reported in 3QFY19.

Key Highlights (Source: Company Reports)

What to Expect: The company remains on track to focus on its core logistics and supply chain management businesses and aims on sustainable long-term growth in its Express business. The company also plans to boost its product structure, improve operating efficiency, enhance service quality and customer experience, thereby gaining market share.

Stock Recommendation: As of September 30, 2020, the company-maintained a decent liquidity position, with a cash balance of RMB4,756.3 million. The stock of BEST gave a negative return of ~6.6% in the past three months and a positive return of ~35.3% in the past one month. The stock of BEST is trading below its average 52 weeks’ trading range of $5.83- $1.91. On a technical front, the stock of the company has a support level of $2.19 and a resistance level of $3.59. On the valuation front, the stock is trading at an EV/Sales multiple of 0.3x as compared to the industry median of 1.3x on TTM (Trailing Twelve Months) basis. Considering the current trading levels, comfortable balance sheet position, decent outlook and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $2.68, up by 3.08% as on February 9, 2021.

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

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