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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

Ring Energy Inc is an independent oil and gas exploration company with headquarters in Midland, Texas. The Company's business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States.

<ul><li>We are lowering our 3Q24 estimates to reflect lower natural gas price realizations and slightly higher estimated operating costs.</li><li>Ring’s 2Q24 realized natural gas price averaged ($1.93)/Mcf, a ($4.25)/Mcf differential to the NYMEX near-term contract average of $2.32/MMBtu.</li><li>The 3Q24 NYMEX near-term contract average price was $2.23/MMBtu. </li></ul>

We are lowering our 3Q24 estimates to reflect lower natural gas price realizations and slightly higher estimated operating costs.Ring’s 2Q24 realized natural gas price averaged ($1.93)/Mcf, a ($4.25)/Mcf differential to the NYMEX near-term contract average of $2.32/MMBtu.The 3Q24 NYMEX near-term contract average price was $2.23/MMBtu. 

Ring Energy, Inc. - Estimate Housekeeping

Lifevantage Corporation is a health and nutrition company that develops dietary supplements. The Company produces nutritional products that are intended to combat oxidative stress to support brain, eye, and joint function, as well as skin canine products.

<ul><li>LFVN reported 1QFY25 ongoing EPS of $0.15 versus $0.13 in 1QFY24, up 15.4% and in line with our forecast.</li><li>As has been the case recently, sales were below expectations, but that was made up for with better-than- expected margins.</li><li>1QFY25 sales were $47.2 million, a decline of 8.1% Y/Y, and below our forecast of $49.8 million, down 3.0% Y/Y. </li></ul>

LFVN reported 1QFY25 ongoing EPS of $0.15 versus $0.13 in 1QFY24, up 15.4% and in line with our forecast.As has been the case recently, sales were below expectations, but that was made up for with better-than- expected margins.1QFY25 sales were $47.2 million, a decline of 8.1% Y/Y, and below our forecast of $49.8 million, down 3.0% Y/Y. 

LifeVantage Corporation - 1QFY25 EPS in Line on Better Margins

Thematic (Sector/Industry)

<ul><li>A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.</li><li>Last week was the peak of earnings season and the outlook remains mooted.</li><li>Fewer companies beat expectations and when they did, the beat was less vigorous than average.</li></ul>

A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.Last week was the peak of earnings season and the outlook remains mooted.Fewer companies beat expectations and when they did, the beat was less vigorous than average.

Furniture/Furnishings Weekly - November 4, 2024

Cybin Inc. is a life sciences company. The Company focuses on psychedelic drug development, unique delivery mechanisms, improved novel compounds, and protocols. Cybin serves customers worldwide.

<ul><li>Compass pushes back timeline for COMP360 Phase 3 readouts and cuts staff by 30%.</li><li>Compass Pathways’ (NASDAQ: CMPS) 3Q24 earnings announcement last week was dominated by the news that, not for the first time, the company has pushed back the timeline for the readout of its first single-dose study (COMP005) of the Phase 3 trial for its lead psilocybin-based drug candidate for treatment-resistant depression (TRD), COMP360, by a couple of quarters to 2Q25 from 4Q24.</li><li>The readout for the second two-dose study (COMP006) has been delayed by at least one year from mid-2025 to 2H26. </li></ul>

Compass pushes back timeline for COMP360 Phase 3 readouts and cuts staff by 30%.Compass Pathways’ (NASDAQ: CMPS) 3Q24 earnings announcement last week was dominated by the news that, not for the first time, the company has pushed back the timeline for the readout of its first single-dose study (COMP005) of the Phase 3 trial for its lead psilocybin-based drug candidate for treatment-resistant depression (TRD), COMP360, by a couple of quarters to 2Q25 from 4Q24.The readout for the second two-dose study (COMP006) has been delayed by at least one year from mid-2025 to 2H26. 

Cybin, Inc. - Why Compass Pathways Is No Compass for Cybin's Progression Prospects

Arq, Inc. operates as a environmental technology company. The Company offers activated carbon technologies to remove harmful chemicals and pollutants, such as PFAS, from water supplies, contaminated land sites, and air emissions which controls the mercury and other contaminants for power generation and industrial companies. Arq serves customers in the United States.

<ul><li>Arq to report 3Q24 results on November 7 before market open with a conference call at 8:30 am ET on the same day. </li><li>We forecast $30.2 million in revenue, gross margin of 37%, and EBITDA of $3.3 million versus consensus of $30.4 million in revenue and EBITDA of $3.3 million.</li><li>We expect another strong quarter of operating results on the back of PAC pricing improvements and operating efficiency. </li></ul>

Arq to report 3Q24 results on November 7 before market open with a conference call at 8:30 am ET on the same day. We forecast $30.2 million in revenue, gross margin of 37%, and EBITDA of $3.3 million versus consensus of $30.4 million in revenue and EBITDA of $3.3 million.We expect another strong quarter of operating results on the back of PAC pricing improvements and operating efficiency. 

Arq, Inc. - 3Q Preview - Look for Continued Momentum in PAC Performance

North America
Insights on North America

Ring Energy, Inc. - Estimate Housekeeping

We are lowering our 3Q24 estimates to reflect lower natural gas price realizations and slightly higher estimated operating costs.

Water Tower Research

LifeVantage Corporation - 1QFY25 EPS in Line on Better Margins

LFVN reported 1QFY25 ongoing EPS of $0.15 versus $0.13 in 1QFY24, up 15.4% and in line with our forecast. As has been the case recently, sales were...

Water Tower Research

Furniture/Furnishings Weekly - November 4, 2024

A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.

Water Tower Research

Cybin, Inc. - Why Compass Pathways Is No Compass for Cybin's Progression Prospects

To conserve cash to fund its COMP360 program, Compass also announced a corporate restructuring involving the downsizing of staff by ~30% as well as...

Water Tower Research

Arq, Inc. - 3Q Preview - Look for Continued Momentum in PAC Performance

We forecast $30.2 million in revenue, gross margin of 37%, and EBITDA of $3.3 million versus consensus of $30.4 million in revenue and EBITDA of...

Water Tower Research