the reviews on reddit and tik tok look so-so, ceo said possible that half of aviclear machines will be returned and treatment growth there has been very weak. Think they will improve the model and have some hope they can accelerate avi but I don't see evidence of that to bank on, do you?
Currently I do not have enough confidence to take a non-speculative position. Similar to what you honed in on: the working capital they’ve tied up in the business is a massive inhibitor of FCF generation which is what I’m concerned about in the next 2 quarters. If they can’t clean that up, bankruptcy is likely.
I previously posted a note but: In their last earnings call, they said that they would be changing that fee schedule. They felt that the device was being under utilized because of the nature of the rental. Now, they will be offering the device for sale. Only the current customers will be offered a choice, by the device or continue renting.
Appreciate the heads up, must’ve missed that detail! Good to hear that others are following the story. Curious if you’re supportive of the pivot to this new model to derm offices?
I think it's a good idea. They believe that it will increase utilization. Right now, many offices are renting the device at a relatively low cost and are not using it, which is taking away resources that can go to an office that would use it. I believe that it's is in the last call (or possibly in an investor presentation).
FYI there is a somewhat similar thesis from a couple months ago: https://seldonofvalue.substack.com/p/cutera-writeup?utm_source=profile&utm_medium=reader2
I left a comment there with some questions that may be worth thinking about. Cheers
the reviews on reddit and tik tok look so-so, ceo said possible that half of aviclear machines will be returned and treatment growth there has been very weak. Think they will improve the model and have some hope they can accelerate avi but I don't see evidence of that to bank on, do you?
Currently I do not have enough confidence to take a non-speculative position. Similar to what you honed in on: the working capital they’ve tied up in the business is a massive inhibitor of FCF generation which is what I’m concerned about in the next 2 quarters. If they can’t clean that up, bankruptcy is likely.
Check their interim reporting, I think they shored up your reservations.
I previously posted a note but: In their last earnings call, they said that they would be changing that fee schedule. They felt that the device was being under utilized because of the nature of the rental. Now, they will be offering the device for sale. Only the current customers will be offered a choice, by the device or continue renting.
Appreciate the heads up, must’ve missed that detail! Good to hear that others are following the story. Curious if you’re supportive of the pivot to this new model to derm offices?
I think it's a good idea. They believe that it will increase utilization. Right now, many offices are renting the device at a relatively low cost and are not using it, which is taking away resources that can go to an office that would use it. I believe that it's is in the last call (or possibly in an investor presentation).