YB new stock pitches (Fri, Mar 6)

SOFW.TA: Israeli med aesthetics co w/ pain-free ultrasound skin tightening. Razorblade model: devices at 60% GM, consumables at ~100% GM. 41% rev CAGR (2021-25), zero debt, $35M cash, shifted profitable. Project $158M rev by 2027 (11x P/E vs peers at 30-61x). Catalysts: NASDAQ listing, China entry 2026, Japan ramp, Pure Impact body contouring. Kardashian endorsements + GLP-1 tailwinds boost demand. Risks: intense competition from InMode/BTL/Classys, regulatory changes, execution. Bull case: $201M rev, $55M profit 2027; weighted 32% IRR to 2027.

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Voss Capital has initiated a new 5.3% portfolio position in Choice Hotels International (CHH), an asset-light hotel franchisor with 60%+ EBITDA margins trading at 10.7x EBITDA (bottom 2.5% of its 10-year range) after falling from $154 to $106 due to U.S. RevPAR declines and lack of domestic room growth. The company is actively shifting its 7,575-hotel portfolio toward higher-margin segments: Extended Stay now comprises 9% of total rooms (11.5% of U.S. rooms) with 12% year-over-year growth, a 6% royalty rate, 40% of the active pipeline, and posted +3.1% ADR with flat RevPAR versus industry-wide declines; International operations (24% of rooms) are scaling rapidly with direct franchising growing to 41% of the portfolio from 19% three years ago, with EBITDA targeted to double to $50 million by 2027 and EBITDA per international unit tripling from 2022 to 2025; and 97% of pipeline rooms are non-economy properties. The company has approximately $700 million in cash (14% of market cap) tied up in balance sheet investments in Cambria and Everhome Suites brands that will be unlocked through sales of completed properties with secured 30-year franchise agreements, providing capital for buybacks at distressed valuations. CHH benefits from demographic tailwinds with 30% of guests over 60 (a demographic projected to increase spending 70% by 2030) and 13% growth in SMB business driven by construction and utility sector demand, while the company is guiding for a return to net U.S. room growth. With 26% short interest, 40% insider ownership, a recent change-in-control compensation amendment suggesting M&A preparation, and historically trading at a premium to peers from 2016-2023 before decoupling in 2024-2025, a reversion to the 20-year median valuation of 14x forward EBITDA (still a 3-6x discount to Hyatt, Hilton, and Marriott) implies approximately 50% upside.

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Credo Technology Group Holding Ltd ($CRDO) dominates active electric cables (AECs) with a 73% market share and has grown revenue approximately 200%, though the stock has declined due to fears that copper will be replaced by optics. The bull case centers on AECs as their crown jewel product, serving every hyperscaler with 2+ years of visibility and forcing competitors like $APH to pay royalties, combined with their vertical integration from SerDes to ICs to AEC design. Contrary to optics replacement fears, the majority of Nvidia's Vera Rubin platform will rely on copper since optics have low supply for the next few years, lasers are supply-constrained, AECs are significantly cheaper, and hyperscalers cannot currently afford optics at scale. The company is innovating beyond their current position with new zeroflap optical transceivers (already secured 3+ customers), active linear cables (ALCs) using micro-LED technology to replace fiber optics in 7-30m applications by 2027, OmniConnect/Weaver technology for faster GPU memory access, and scale-up retimers for long-distance GPU-to-GPU connections. Management guided for 150% growth in Q4, and at the current price of $105, the stock trades at 24x forward P/E with stable high-margin AEC growth plus incremental growth from Vera Rubin, zeroflap optics, and retimers. Under conservative assumptions with a 30x terminal P/E multiple, the stock could reach $210 in 3 years, representing approximately 26% IRR.

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