Xcelerate Inc. acquires engineering/patents and applies to early-stage medical technology companies. It supplies to controlled clinical care settings, in which developments will be trialed, tested, and applied, as well as provides end-to-end controlled medical technology development. The company was formerly known as Union Dental Holdings, Inc. and changed its name to Xcelerate Inc. Xcelerate Inc. was incorporated in 1996 is based in Mauldin, South Carolina.

Xcelerate Inc.

Healthcare

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

XCRT reported revenue of USD 3mn in the last 12 months, up 141% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 52% from FY23 to USD -0.00.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 30ppts and its growth decelerated by 23ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -49.4% in the last 12 months, up from -226.2% in FY22. 

Historically, XCRT has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -49.8%, a growth from -245.1% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to -130.7% in the last 12 months, an increase from -1202.2% in FY22. 

Xcelerate Inc. reported a return on equity (RoE) of 478.4% in the last 12 months, down from 14962.5% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to 398.2%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -48.6 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

XCRT has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, XCRT is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, XCRT is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. 

Xcelerate Inc.

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Xcelerate Inc.

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