YB new stock pitches (Wed, Jul 22)

Smart Shooter (SMSH.TA), an Israeli maker of battle-proven, AI-driven electro-optical fire control systems (the SMASH sight series) and lightweight remote weapon stations (Hopper), listed on the Tel Aviv Stock Exchange on March 5, 2026, raising ~₪200M and bringing post-IPO cash to ~$82.6M ($80M net cash, zero debt). Its closed-loop trigger technology combines a camera-computer image recognition system with a mechanical trigger lock, enabling even novices to achieve 80% first-shot hit rates on moving targets (versus 0% for novices/20% for experts with red-dot sights), overcoming the ~200ms human reaction delay; the basic SMASH sight sells for ~$8,000, advanced ~$11,000, and the Hopper RWS ~$90,000 (first deliveries June 2026). SMSH is the only proven micro-tactical C-UAS solution capable of killing cheap FPV drones at 200-300m using standard 5.56 NATO rounds at ~$0.40-$1.20 per interception, a decisive cost advantage over EW, missiles, kinetic cannons ($1-1.5M/unit), interceptor drones (~$50K), lasers (tens of millions/unit), and shotguns, while its competitive moat rests on first-mover status, patents (2032-2042), a data flywheel, training-driven switching costs, and embedded defense procurement. Led by Rafael alumni CEO Michal Mor (7.24%) and CTO Avshalom Ehrlich (3.62%), with former Elbit CEO Yossi Ackerman advising, the company grew 2025 revenue ~50% to $36.8M (54% gross margin, ~17% EBIT margin, ~32% ex-R&D), generating $6.1M EBIT and $6.0M net income (+940% EBIT YoY), with a ~$39.65M backlog (~$45M expected delivered in 2026), operating leverage from ~50% single-shift capacity utilization (2x-4x headroom), $29.5M NOLs shielding taxes through 2028, and 54.96M fully diluted shares; its existing ~4.4M-soldier customer base implies >200,000 potential sights and a ~$1.6B TAM before new markets or Europe's military expansion, addressing C-UAS (~$6.6B in 2025 to ~$23B by 2030, 28% CAGR), fire control (~$7.7B), and remote weapon station (~$11.8B) markets. Valuation uses a 13% discount rate and 18x FCF exit multiple: base case ₪29.6 (63% growth decelerating to 35%, 56% GM), bear case ₪13.10 (growth plateaus, GM compresses to 47%, eventual strategic acquisition at 13x FCF), and bull case ₪35 at 18x or ₪41 at 22x (~50% CAGR to ~$300M 2030 revenue, ~2% of C-UAS market); probability-weighting (30% bear/45% base/25% bull) yields ₪27.5 (30%+ upside), or ₪29.15 (40%+ upside) under a more bullish 20%/55%/25% weighting. Key risks include competitive displacement from Ukraine war-driven AI weapons or downward expansion by Kongsberg/Rheinmetall, global supply chain shocks, Israel-related geopolitical/export risk, capital allocation risk given limited public-company experience, customer concentration (top three territories ~86%+ of revenue), and key-person risk. Catalysts are the Hopper RWS sales cycle launch and traction with existing/new clients; the author notes a recent contract win moved the price above the ₪18 pre-research level and expects volatility with defense sector drawdowns to offer better entry points for patient investors.

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Talen Energy (TLN) is a merchant power generator positioned to benefit from surging AI data center electricity demand, framed as 'electricity refineries' where power is the scarce input. After two decades of underinvestment in power assets amid flat electricity demand, AI data centers now depend on reliable power, but new generation takes years to build due to permits, transmission, equipment, and labor constraints, making existing infrastructure far more valuable than costly, slow new builds on a replacement-cost basis. Talen already owns a large fleet of natural gas, nuclear, and oil plants, many in the fast-growing PJM market, a key region for AI data centers. As a merchant generator, Talen sells electricity at market prices rather than fixed regulated returns, giving it substantial upside in a supply-constrained market with skyrocketing demand. At a $17 billion market cap, Talen trades well below peer merchant generators Constellation Energy (CEG) at $90 billion and Vistra Energy (VST) at $50 billion.

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Wix.com ($WIX), a SaaS website builder trading ~$51 (down 85% from highs), is being irrationally punished by the market over post-pandemic normalization and AI/vibe-coding disruption fears. Revenue splits into creative subscriptions (71% of revenue, 82% gross margin: premium plans, domains, Wix Studio) and business solutions (29% of revenue, 30% gross margin: payments, PoS, shipping, email). Both streams grow steadily with largely recurring revenue, and ~2% of users are paid. The stock's volatility stems from four narratives: 20% pandemic-era user growth (2020) that got extrapolated, subsequent normalization despite continued fundamental strength, the August 2023 Wix Studio launch for agencies/freelancers (partner revenue grew 30% YoY in 2024 to $610m, though slowing to 23% the next year), and AI disruption fears. To counter the vibe-coding threat, Wix acquired AI app-builder Base44 in 2025 for over $200m (including earn-outs through 2029), which had $10m ARR within six months of existence and is growing explosively; peers like Lovable, Cursor, and Replit trade at 13-25x ARR, implying Base44 could be worth ~$2.1B at the lowest multiple (the CEO suggested it could approach Wix's entire $2.1B market cap), making the acquisition a bargain despite Base44 contributing under 4% of revenue. The author conservatively models Base44 at 40% gross margin (vs. current 67%) given its inference-heavy model, though it operates with 400 employees; ex-Base44 operating profit would be ~$200m, and adding $150m in savings from a 20% workforce reduction brings ex-Base44 post-restructuring operating profit to ~$350m. Management prioritizes growth over profit via heavy marketing/R&D spend. Using a sum-of-parts valuation, fair value exceeds the current share price in both scenarios; reversing the current market cap implies the market either values Base44 at only $1.1B (7x ARR) or doesn't believe Wix will continue performing, neither supported by data. Wix generates over $500m FCF annually (partly due to SBC) and aggressively buys back stock, repurchasing 17.6m shares (~one-third of shares outstanding) for $1.6B at an average $91/share, funded largely by a $1.15B 0% coupon convertible note issued September 2025 (convertible above $210/share). The author is bullish and building a position over the coming months provided price and fundamentals hold

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