Materials
Gradient's 17-page initiation report highlights a variety of fundamental concerns and earnings quality issues: 1) Increasing reliance on pricing to drive revenue growth and looming Performance Chemicals weakness. 2) Surging receivables suggest declining revenue quality. 3) Inventory levels have diverged from near-term demand estimates and appear at odds with expectations of gross margin expansion. 4) Facing margin headwinds from its accrued liability and prepaid expense accounts. 5) Analysts may be underestimating FY23 depreciation. 6) Trades at a massive premium to peers across a wide array of both trailing and forward-looking valuation metrics.
Edition: 153
- 03 February, 2023