SMTI

Look past the headline -$37.6M net loss and -$4.36 EPS: the bulk of that is the mid-September 2025 shutdown of Tissue Health Plus (THP), the value-based wound-care unit, now reported as discontinued operations. The MD&A is explicit — 'persistent losses related to THP and a lack of any firm commitments from potential investors' drove the Board to kill it and refocus 'exclusively on products and technologies for use in the surgical market,' leaving a single reportable segment. What remains is genuinely good: revenue compounded from $24.1M (FY21) to $103M (FY25), grew 19% last year, carries a 92.7% gross margin, and — critically — swung to $7.3M of operating income (+480% YoY) with $6.79M of positive operating cash flow. A 93%-gross-margin, ~20%-grower selling CellerateRX, BIASURGE, BiFORM and ALLOCYTE Plus into hospitals is the kind of franchise that can re-rate as the P&L cleans up.

Valuation is not demanding for that profile: at $24.84 the market cap is $228M, or 2.2x FY revenue. If the continuing surgical business holds ~20% growth and its newly-positive operating profitability, a modest re-rate toward ~2.7-3x sales is defensible — hence a ~$28 anchor. That is upside, but not the multi-bagger the growth rate alone might suggest, because the balance sheet is the offsetting story.