RCEL

AVITA has a genuinely attractive product economics story wrapped in a distressed balance sheet. RECELL and the newer RECELL GO / GO mini and Cohealyx portfolio carry an 82.1% gross margin, and FY2025 revenue reached $71.6M with the net loss narrowing to -$48.6M from -$61.8M. But the top line is decelerating hard — growth fell from roughly +28% in FY2024 to +11.5% in FY2025 — even as the company still burns cash (operating cash flow -$31.2M) and carries a -59.4% operating margin and a $408.4M cumulative deficit. This is a company that has spent a decade and hundreds of millions and still cannot self-fund.

The balance sheet is where the thesis breaks for a retail investor. Stockholders' equity is negative (-$16.6M), current liabilities ($62.7M) dwarf current assets ($35.5M), and year-end cash was just $10.2M against a $31M annual burn. The 10-K makes the fragility explicit: management repaid the OrbiMed facility and refinanced into the January 2026 Perceptive Credit Agreement — a $60M facility with $50M funded — but flags that 'if the Company's net revenue does not equal or exceed a certain amount... the Company will be in default.' So the company has swapped a near-term maturity wall for a revenue-covenant tripwire, and the $10M additional commitment is itself gated on hitting a revenue hurdle by March 2027. With growth already slowing, that covenant is a live risk, not a formality.