YB new stock pitches (Fri, Aug 8)

CareCloud (CCLD) is an undervalued health technology company trading at a 33-50% discount to peers despite its 30%+ EBITDA margins and captive offshore tech talent providing a cost advantage. The company offers a complete end-to-end tech-enabled solution covering revenue cycle management, practice management, and electronic health records. Following transformational acquisitions in 2020 (CareCloud and Meridian Medical), CCLD experienced revenue declines due to known customer losses and integration issues with medSR's Epic systems relationship, but has now stabilized operations. With $74 million in tech-enabled revenue generating $27 million in EBITDA, a 10x multiple would value CCLD at $210 million (after subtracting $60 million in net debt) versus its current $102 million market cap. The company's acquisition strategy, supported by projected $20+ million in cash by year-end, could drive 2026 EBITDA to $31-37 million, suggesting a price target of $5.91-10.82 per share (based on 10-14x multiples).

Read the full article here. Read time: 3 min

IZEA Worldwide, a marketing firm that connects brands with social media influencers, is undergoing a promising turnaround led by new CEO Patrick Venetucci who has slashed operating expenses from 98% to 51% of revenue, bringing the company near break-even in Q1 with 15% year-over-year revenue growth. Trading at a $53.78M market cap with $52.13M cash (creating a minimal $1.65M enterprise value) and implementing an $8.6M share repurchase program (17% of float), IZEA is supported by activist investor GP Investments, which holds two board seats and leads capital allocation decisions. The company has secured deals with major brands like Nestle, Acer, and Jeep while focusing on an 'America First' model to target higher-quality enterprise clients. Despite risks including inconsistent profitability history, competitive market pressures, and client concentration (one client representing over 10% of revenue), IZEA offers 30-100% upside potential with price targets of $4-6.55 based on 6-8x EBITDA ($3-5M expected) or 1.5x revenue multiples, plus its substantial cash position.

Read the full article here. Read time: 8 min

Thermon Group Holdings (THR), a niche industrial business with a heat trace duopoly, has successfully pivoted from oil and gas to more diversified markets (pharma, rail/transit, electrification, nuclear, consumer) which now represent 70%+ of revenue. The company maintains exceptional 40%+ gross margins with minimal capital requirements (2% capex/revenue) in its razor-razorblade business model, where 30% comes from newbuilds and 70% from maintenance/replacement over 30-50 year plant lifespans. Orders are accelerating post-election after a period of large project uncertainty, positioning THR for 6+ quarters of beat-raise trajectory. Currently trading at 13x unlevered cash flow/earnings, the company has potential for 50-100% upside at 15-20x on projected $3+ FCF/share by 2026. THR's $1 billion enterprise value, underlevered balance sheet, and strong cash generation make it an attractive M&A target for both strategic buyers and sponsors, with Brookfield's recent $1.7 billion acquisition of NVT's comparable Thermal Management business providing a valuation benchmark.

Read the full article here. Read time: 3 min