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Cosmo (SWX:CMHC) Guidance Shock Keeps Its Undervalued Narrative In Play

Simply Wall St · 1d ago

Cosmo (SWX:CMHC) has attracted fresh attention after recent share price moves left the stock up over the past month but slightly down across the past 3 months and year to date.

The recent 1 month share price return of 13.6% suggests momentum in Cosmo is picking up, even though the 90 day share price performance is slightly lower and the year to date share price return is still down 43%.

Scan how Cosmo compares with other potential rebound candidates by reviewing our curated 194 high quality undervalued stocks featuring similar quality and valuation profiles.

Cosmo now trades at a steep discount to both analyst targets and an estimated fair value, even after the recent rebound. Is the market being prudently cautious, or is it overly pessimistic on this recovery story?

Most Popular Narrative: 40% Undervalued

The narrative fair value for Cosmo sits at CHF100, which is well above the last close of CHF60.10. That gap is what keeps investors focused on whether the story around its pipeline and AI products can justify the implied upside.

Catalysts
Preliminary Unaudited Revenue and Cash

• Revenue: €266.8 million, representing a year-on-year increase of 188% compared to €92.8 million in 2023. This includes significant project-based revenues from GI Genius™ and Winlevi® of €190.2 million.

• Operating profit for fiscal year 2024 was €148.9 million, compared to a restated operating loss of €1.9 million in 2023.

• Gross operating profit (EBITDA) increased by 1,517% year-on-year to €161.2 million.

• Cash, equivalents and investments increased by 239% to €170.4 million, compared to €50.3 million in 2023, with zero debts.

Financial Guide for 2025
The company's forecasts for 2025 are minimal, as it is negotiating licensing agreements and does not want to give revenue projections based on advanced projects.
Total revenue: €102 to €107 million, of which recurring revenue (royalties and manufacturing revenue) is €85 million to €90 million, and project revenues are €17 million.
Core business EBITDA: €40 to €42 million, including cost of sales and selling, general and administrative expenses.
Strategic investment in research and development: €40 million, focusing on late- and early-stage assets and AI-driven innovations.
Overall EBITDA, including investments in research and development: expected to be between €1 million and €3 million.
Cash, equivalents and investments: expected to remain above €110 million.
The market has responded to these forecasts with a sharp correction in the share price.

Business and pipeline update
GI Genius™

See why 85 investors see Cosmo as 40% undervalued.

Result: Fair Value of CHF100 (UNDERVALUED)

Still, this Cosmo narrative hinges on successful licensing deals and smooth clinical progress, so any setback on partnerships or trial outcomes could quickly cap the upside story.

Find out about the key risks to this Cosmo narrative.

Next Steps

If this mix of optimism and concern around Cosmo leaves you undecided, act promptly and review the full picture for yourself by weighing up the 2 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Cosmo?

If Cosmo has sharpened your focus on valuation and risk, do not stop here. Broaden your opportunity set by scanning other ideas that match your own checklist.