By Brad Sorensen, CFA
NASDAQ:COSM
READ THE FULL COSM RESEARCH REPORT
Cosmos Health (NASDAQ:COSM) is a vertically integrated healthcare group with a portfolio that spans pharmaceutical and nutraceutical brands, pharmaceutical distribution, proprietary and contract manufacturing, as well as an emerging set of technology- and services-oriented assets. Over the last 18–24 months, the company has combined traditional, cash-generative businesses in Europe with targeted acquisitions and R&D initiatives intended to lift revenue quality and pursue higher-growth projects — a strategy we believe makes COSM an attractive option for investors.
On the commercial side, Cosmos owns established pharmaceutical brands (C-Sept and C-Scrub), nutraceutical brands (for example, Sky Premium Life and Mediterranation), and operates Cosmofarm, its distribution and sourcing arm, which supplies more than a thousand pharmacies and maintains an extensive supplier network. That core business provides recurring revenue, inventory expertise, and manufacturing/distribution relationships that lower the operational risk of rolling out new consumer healthcare products. Company management has been clear that the company will continue building proprietary branded products alongside contract manufacturing and distribution to create multiple, complementary revenue streams.
In parallel, the company has pursued strategic acquisitions and investments to add to growth opportunities in an ever-changing market. Notably, Cosmos acquired ZipDoctor in 2023, a telehealth subscription business in the U.S., which gives the group a direct-to-consumer services channel for cross-selling nutraceuticals and OTC offerings. In early 2024, Cosmos completed what we believe will prove to be the most important acquisition when it purchased Cloudscreen, an AI-enabled drug-repurposing and R&D platform, positioning the company to participate in higher-margin discovery and licensing outcomes. These moves further illustrate management’s plans: combine stable distribution and brand revenues with higher-upside technology and services assets.
Recent corporate actions reinforce that narrative and show management putting capital behind growth and optionality. In 2025, Cosmos reported its best-ever third quarter with double-digit year-over-year revenue growth and materially improved gross profit and adjusted EBITDA, a signal that the mix-shift toward higher-margin activities and improved topline execution are beginning to show in the financials. Around the same time, the company disclosed an increase to its digital asset allocation — purchasing additional Ethereum under a disclosed digital assets program.
We believe the investment opportunity in COSM can best be framed as a blend of reliable and growing cash flow from distribution and branded products, plus potentially substantial upside from three major areas. The first is brand and geographic expansion: scaling existing pharmaceutical and nutraceutical brands into additional retail channels and foreign markets, leveraging an established network. The second is services and recurring revenues through telehealth and digital offerings powered by ZipDoctor — recurring subscription models have favorable unit economics if patient acquisition costs can be managed. The third is technology-enabled R&D: Cloudscreen’s AI-driven repurposing and R&D collaborations could generate licensing fees or product candidates that materially increase margins if any program advances through development milestones. Each theme is distinct but complementary, allowing management to allocate capital across lower-risk and higher-risk initiatives depending on progress and liquidity.
In the near future, Cosmos’ immediate priorities appear to be continuing to grow its pharmaceutical, nutraceutical, and distribution sales, advancing Cloudscreen collaborations, and selectively deploying capital to commercialize proprietary formulations and expand into new markets. If Cosmos can sustain revenue growth while improving gross margins through higher-margin product sales and monetized services, the valuation upside could be meaningful relative to current market expectations.
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