YB new stock pitches (Wed, Sep 24)

AirSculpt Technologies (AIRS), a minimally invasive cosmetic surgery company operating 31 facilities across the U.S. and U.K., presents a compelling turnaround story trading at 10x EBITDA versus peers at 13-15x. The company faced execution challenges under previous management despite generating over $80M in gross profit growth between 2020-2023, with EBITDA increasing only $10M due to excessive operating expenses that led to negative free cash flow in 2024 and debt covenant violations. A new CEO with elite private equity experience has dramatically improved operations, cutting corporate SG&A and advertising expenses almost 50% year-over-year while doubling EBITDA and achieving record lead growth, with same-store sales growth expected to return in Q4 2024. The previously bearish GLP-1 weight loss drug thesis has been debunked, as historical data shows demand for cosmetic procedures rebounds 25%+ after 12-18 months of initial decline, supported by surging Google search trends and McKinsey analysis noting GLP-1s are boosting medical aesthetics demand. The technical setup is extraordinary with 75% insider ownership and 40%+ short interest creating potential for a significant squeeze, while the company's largest shareholder led an equity injection eliminating dilution risk and providing covenant headroom. With current revenue of $180M and 10% EBITDA margins, management has a clear path to 30% EBITDA margins and existing capacity to generate $750M in revenue without significant additional investment. The company trades at attractive unit economics with new surgical centers generating 100% cash-on-cash returns in year one at an average $13,000 procedure price, positioning for 50-70% base case upside with multi-bagger potential as the business grows into its capacity and expands store count, catalyzed by positive revisions, organic growth inflection, and potential short covering.

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Kinaxis Inc. (KXS.TO) reported strong Q2 results with SaaS revenue growing 17% and ARR rising 15%, while adjusted EBITDA surged 54% to $33.7 million representing a 25% margin, marking the fourth consecutive quarter achieving Rule of 40 status which signals elite software company performance balancing growth and profitability. Management reported its best-ever second quarter for new business with higher competitive win rates and a growing pipeline of deals, leading them to raise SaaS revenue growth guidance for the financial year with scope for further upside. Growth was well balanced between new customer additions and expansions within the existing base, with expansion revenue carrying structurally higher margins, while AI-enabled modules are gaining traction and further differentiating the platform, positioning the company to continue executing on its growth objectives despite shares pulling back after the results.

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Barry Callebaut AG (BARN.SW), the world's largest B2B chocolate maker producing 20% of global industrial chocolate output, serves major customers like Nestle, Mars, and Hershey through 8-10 year contracts with volume commitments and price pass-throughs across three segments: cocoa products (24% revenues), food manufacturers (60% revenues), and gourmet & specialties (17% revenues). The company faced a perfect storm beginning with salmonella contamination at its Wieze plant in 2022, followed by poor West African weather conditions that reduced cocoa production 14% in 2023-24, driving cocoa prices from $2,000 to over $10,000 per metric ton and causing negative free cash flow of CHF 2.3 billion in FY2024 due to hedging margin requirements that pushed net debt to CHF 6.1 billion (6x EBIT). New CEO Peter Feld, a KKR turnaround specialist who successfully exited WMF and GfK investments, has implemented the 'BC Next Level' restructuring plan targeting CHF 250 million in annual cost savings through 2,500 job cuts (19% of workforce) and factory closures, while cocoa market fundamentals are expected to improve from 2026 onwards as West African supply responds to higher prices, with ICCO projecting stocks-to-grinding ratio recovery from 26% to 32% and potential 142,000 ton global surplus in 2024/25. If cocoa prices retreat to 2023 levels (down 60%), hedge gains would reduce net debt to approximately CHF 3.0 billion, resulting in 9.1x EV/EBIT versus a target 15x multiple yielding a CHF 1,924 price target (~100% upside from current CHF 960), though risks include prolonged cocoa market tightness, GLP-1 drug impact on chocolate consumption (~1% global volume impact), and customer concentration with Nestle representing 10% of revenues.

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