YB new stock pitches (Thu, Oct 16)

MDxHealth SA (MDXH), a NASDAQ-listed precision diagnostics company focused on prostate cancer and urologic diseases, is nearing profitability after generating $90 million in 2024 revenue (+28% YoY) and guiding for $108-110 million in 2025 with positive adjusted EBITDA expected in Q2 2025. The company offers three core tests: SelectMDx (urine-based pre-biopsy risk stratification), ConfirmMDx (tissue-based post-negative biopsy risk stratification), and Genomic Prostate Score (acquired from Exact Sciences in 2022), while recently acquiring Exosome Diagnostics' ExoDx Prostate test from Bio-Techne in September 2024, which management expects to contribute over $20 million in 2026 revenue and accelerate growth to approximately 30%. With a market opportunity of 299,000 new U.S. prostate cancer cases annually and supportive CMS policy recognizing molecular biomarkers, MDXH trades at 2.2-2.6x EV/sales compared to peers Veracyte (6-7x), Guardant (10-11x), and Natera (11-12x). The company has $32.8 million in cash against $75.6 million in debt with 49.5 million shares outstanding, and a price target of $8.24 represents approximately 101% upside assuming 2026 sales of $131 million at 3.5x EV/sales multiple. Key risks include liquidity concerns with going-concern language dependent on covenant compliance, potential guideline/reimbursement changes favoring competitors like Veracyte's Decipher, execution risk on ExoDx integration, and dilution from 1.0 million warrants at $5.265 and potential earn-outs capped at 7.5% stake.

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Alliance Aviation Services Limited (AQZ.AX) is a FIFO aviation operator trading at attractive valuations of 6x P/E, 6-7x EV/EBIT, and 3.5x EV/EBITDA versus a tangible book value of $2.75, representing the cheapest valuation in the company's history. Qantas attempted to acquire the company at 20x P/E in 2022 but was blocked by regulators, while the business is now finishing a major capital investment program and should delever rapidly, transitioning from investment mode to cash generation. The company operates a stable but growing business with primary exposure to Australian miners, though faces headwinds including small-cap Australian market disinterest, broken deal history, and founder retirement. Catalysts include Pacific Equity Partners showing acquisition interest, the retiring founder, and Viburnum (10% owner) having a history of selling portfolio companies like MYX.AX, with insiders and founders owning 25% total and showing past willingness to sell. The investment thesis centers on limited downside risk of approximately 10% versus 40-50% upside potential on a deal, with a price target of $3.60 representing 10x P/E or 1.2x forward tangible book value of around $3, compared to Qantas's previous willingness to pay 20x P/E.

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Grindr Inc. (GRND) is trading at approximately 13.5x EBITDA after a significant selloff triggered by a margin call, with Raymond Zage and James Lu confirming a takeover bid at $15/share (representing ~25% upside from current $12 levels) backed by preliminary conditional debt financing of up to $1 billion from Fortress. The company has grown 30%+ topline since FY21 and recently raised FY25 guidance to 27% revenue growth and 43% EBITDA margins, with forecasted $245 million EBITDA by FY27 (~10x FY27 EBITDA at takeout price). The takeover attempt follows James Lu's margin call by Temasek on Friday, forcing liquidation of shares, while both executives together control 120 million shares (64% of outstanding stock) and the deal allows management and shareholders with >4% stakes to roll their investment into the private takeout. Key risks include deal financing and execution challenges, as additional financing beyond the $1 billion may be required if shareholders don't roll their stakes, potential CFIUS regulatory issues, and the company's premium valuation compared to peers MTCH and BMBL, though management argues this is justified by superior growth and margin profiles including under-penetrated ad monetization opportunities

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