YB new stock pitches (Tue, Jun 30)

Vera Therapeutics ($VERA) is a late-stage biotech with no product revenue rated BULLISH with a $74 price target (+77.7% from $41.64). Its lead drug, atacicept, is an engineered fusion protein that uniquely blocks two cellular signals (BLyS and APRIL) to treat IgA Nephropathy (IgAN), differentiating it from single-pathway competitors and starving both mature and long-lived antibody-producing cells. The Phase 2b ORIGIN trial showed a 31% protein reduction at week 36, 60% antibody decline and 81% hematuria resolution at 96 weeks, while the Phase 3 ORIGIN 3 trial hit its primary endpoint with a 46% protein reduction at week 36, supporting the FDA submission. The secondary asset MAU868 is a Phase 2 neutralizing monoclonal antibody for BK virus in kidney transplant recipients (no approved competitors), serving as a clinical hedge with strong interim viral load reduction and placebo-like safety. The bull case rests on accelerated FDA approval by the July 7, 2026 PDUFA date, with the critical Phase 3 eGFR data readout in Q3 2026 as the key de-risking catalyst (followed by a Q4 2026 supplemental BLA, H1 2027 EMA submission, and late 2027 MAU868 Phase 2b data); positive eGFR data could push shares to the $74-$85 target zone. Atacicept benefits from Breakthrough Therapy Designation and patents to 2035+, though both drugs were licensed from Merck Serono, triggering milestone payments and royalties. The bear case centers on a messy/failed Q3 2026 eGFR readout, MAU868 safety/efficacy failure, third-party CMO manufacturing inspection failures, long-term immunogenicity/infection risks, or payer pushback in a crowded market, which could send shares to a $12-$18 cash floor. Financially, Vera holds $596.8M cash with zero debt but posted a $121M Q1 2026 net loss ($106.5M operating cash burn), leaving ~17 months of runway into late 2027, making post-approval equity dilution likely. The $74 target derives from a risk-adjusted rNPV (2026-2036) at a 12% discount rate, modeling atacicept's $4.5B IgAN TAM ($110,000/patient US price, 11% US/6% EU share, 64% cumulative regulatory success probability) and MAU868's $1.2B TAM ($45,000/course, 15% peak share, 25% PoS, 2029 launch), with no terminal value assumed post-2036 due to biosimilars.

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2G Energy AG ($2GB.DE) is a German integrator of behind-the-meter gas engines (sourcing from MWM, MTU and Jenbacher rather than manufacturing engines itself), positioned to play the US grid capacity crunch as data centers turn to onsite power. The investment case stems from a SemiAnalysis report detailing how US grid headroom is effectively gone and expected to turn negative by 2027, with new gas capacity barely being added amid 3-4 year lead times for turbines/grid infrastructure and 4-6 years to bring a conventional gas plant online—timelines data centers cannot wait for. The report projects that from 2028 onward, over half of new US data centers will rely on behind-the-meter generation, with a TAM exceeding 50 GW/year by 2029, explicitly highlighting gas engines (RICE) and fuel cells—exactly 2G's segment. While the report names Bloom Energy (rerated to ~10-13x revenue), Bergen Engines and Wärtsilä as beneficiaries, it omits 2G, which offers similar exposure at a fraction of the valuation. At ~€64, 2G trades at ~23-24x 2027E earnings and ~2x revenue, based on guided revenue of €570-620M and EBIT margins above 11%. The thesis is validated by a major US data center order in the low triple-digit MW range (confirmed one day after the author's May 25, 2026 highlight) with more deals in negotiation, plus a higher-margin recurring-revenue Rental business in Texas providing containerized gas engines for bridge power in ERCOT, matching the report's hybrid use case. The key question is no longer demand but capture, where even 1-2% of a 50+ GW annual market would be meaningful. Risks include the stock having already rerated, 2026 being a transition year, and 2027 execution being decisive for margins and follow-on orders; nonetheless, 2G remains one of the cheapest listed ways to express this theme with real order validation in place.

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RADCOM (RDCM) is a Tel Aviv-based telecom network assurance software company and an activist-driven special situation, trading at ~$12.80 with $109.9M net cash ($6.53/share, ~51% of market cap), zero debt, and 16.84M diluted shares, implying a cheap EV of ~$104M against $71.5M FY2025 revenue (+17.2% YoY), 73% gross margins, 20.6% non-GAAP operating margin, and $15.2M FCF—just 1.45x EV/Sales and 6.8x EV/FCF. The thesis rests on three converging catalysts: (1) a 5G Standalone inflection (Omdia confirms 5G core spending rose 83% YoY in Q4 2025) that structurally favors RDCM's cloud-native, AI-native ACE platform and new Neura agentic AI offering over legacy probe-based competitors NetScout (NTCT) and VIAVI (VIAV) that face architectural retrofit disadvantages, with greenfield Tier-1 references at AT&T, Dish, and Rakuten; (2) an established 38.2% activist bloc (Lynrock Lake 18.9%, Zisapel founding family 14%, Value Base 5.3%) that seated three M&A-focused independent directors at the May 19-20, 2026 AGM, including 25-year UBS Israel investment banking head Tomer Jacob (the M&A executor in the chairman track), Liat Aaronson (M&A attorney), and Guy Levit (sold TeleMessage to Smarsh); and (3) a bottoms-up cost-takeout of ~$19.6-21.3M (43-46% of the ~$45M GAAP OpEx base) that a strategic acquirer (most plausibly NetScout) could eliminate, lifting pro-forma operating margin to 39.5-42% and pro-forma EBITDA to $29.7-31.5M. The phased activist playbook anticipates a $60-80M special dividend/buyback (Q3-Q4 2026), a strategic review committee and banker engagement (Q4 2026-Q1 2027), acquirer outreach (NTCT, VIAV, KEYS, EXFO, Nokia, Ericsson) in 2027, and a definitive sale at $33-37 in H2 2027, citing precedents like VIAVI/Spirent (~$1.0B, 19x EBITDA) and Keysight's 26.3x EBITDA Spirent bid, with RDCM warranting a 6-7x revenue / 14-16x pro-forma EBITDA premium given its pure-software, 73%-margin, cloud-native model. Bear case is a $15 floor (failed sale, defaults to $60-80M capital return), base case (no M&A) is $22 via leveraged recap plus second special dividend, and the bull case is $33-36 (45% weighting) on a strategic sale, yielding a probability-weighted fair value of ~$28 versus $12.80. Risks include NetScout's 3-5x larger salesforce and 10:1 R&D spending capacity, VIAVI's ongoing Spirent integration, elevated 8.6% SBC, a finite 18-30 month architectural-advantage window, and recent influencer-driven volatility (a 30% two-day drop). Asymmetric risk-reward with multiple known catalysts.

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