Zacks Small Cap Research Press Releases

VREOF: Vireo Growth’s Strong Revenue Growth Supports Price Target of $45.00

Wed, 12 Aug 2026 09:20:00 -0400

OTCQX: VREOF

2nd Quarter 2026 Financial Results

On August 11, 2026, Vireo (OTCQX: VREOF) released 2nd quarter 2026 financial results, which showed strong revenue growth on a GAAP, Pro Forma, and organic basis.

Vireo reported Q2 GAAP revenue of $209.3 million, up 335% year-over-year, driven primarily by recently completed M&A transactions. Pro forma revenue was $254.9 million, reflecting the acquisitions of Hawthorne, Bridgewell, and PharmaCann as if they had been completed on April 1, 2026. During the quarter, Vireo closed its acquisitions of Hawthorne, Eaze, and Bridgewell, while announcing the acquisitions of FLUENT and C21, which will expand its retail footprint in Florida and strengthen its Nevada operations. Organic, or same-stores sales growth was approximately 7.0% in the quarter.

Vireo continued its aggressive acquisition strategy following quarter-end, closing the PharmaCann transaction to deepen its Colorado presence and entering Pennsylvania through the acquisition of PhytoNatural dispensary licenses. The company also announced an agreement to acquire select Cannabist assets, expanding its Colorado platform while entering Massachusetts, New Jersey, and Illinois. In addition, Vireo announced a merger with Planet 13 to further strengthen its positions in Nevada and Florida and expand its Illinois operations, as well as a four-deal transaction designed to establish a fully integrated vertical operation in Ohio, its 15th state.

Assuming completion of all announced transactions, Vireo expects to become the largest U.S. cannabis operator by dispensary count, with approximately 270 locations, and one of the largest U.S. cannabis companies by revenue. To support its continued acquisition strategy, the company secured a new asset-based revolving credit facility with an initial $65 million commitment, expandable to $105 million, priced at Term SOFR plus 1.75%–2.00%. Vireo ended the quarter with $122.7 million in cash and expects to remain active in pursuing additional acquisitions.

Vireo's management frames the current cannabis landscape as one where scale by itself is no longer sufficient to build lasting value. Instead, management points to disciplined capital allocation, operational execution, and effective integration as the traits that will separate durable winners from the competition. That thinking underlies every acquisition completed during the quarter. Rather than chasing growth for its own sake, the company is assembling a diversified cannabis and agribusiness platform in which each new investment adds to the strength of the whole organization.

With its pending transactions, Vireo now has one of the largest operating footprints in the industry, and management remains focused on lifting profitability, growing free cash flow, and building individual businesses worth $100 million or more across its core markets over time. The Hawthorne and Bridgewell acquisitions mark a deliberate step toward diversification, laying the groundwork for a national agribusiness supply platform that extends the company's reach beyond cannabis and forms the basis of its new non-cannabis reporting segment. Management believes these investments position Vireo to show the full earnings power of its platform as integration work carries into 2027.

Balance Sheet

As of June 30, 2026, total current assets excluding income taxes receivable were $374.0 million, including cash on hand of $122.7 million and marketable securities of $1.0 million. Total current liabilities excluding uncertain tax liabilities and contingent consideration were $181.4 million. Total debt outstanding was $298.8 million. We estimate the leverage ratio to be approximately 1.20x based on 6/30/26 balance sheet numbers.

Subsequent Events

After June 30, 2026, Vireo significantly expanded its footprint through a series of acquisitions and financing moves. The company completed its purchase of PhytoNatural through the Vive Penn joint venture, gaining a non-operational medical cannabis retail permit that could support up to six dispensaries and marking its entry into Pennsylvania. It also signed a definitive agreement to acquire cultivation, manufacturing, and up to 20 retail assets from The Cannabist Company, strengthening its Colorado presence while entering Illinois, Massachusetts, and New Jersey. It also announced an all-stock merger with Planet 13 to add cultivation, processing, delivery, and retail operations in Nevada, Illinois, and Florida.

Separately, four acquisitions in Ohio brought the company into its 15th state with substantial scale, including eight dispensaries, a cultivation and processing facility, and related real estate. Vireo also completed its acquisition of certain PharmaCann assets in Colorado, converting a prior management agreement into outright ownership, and secured a new asset-based revolving credit facility starting at $65 million and expandable to $105 million, priced at Term SOFR plus 1.75% to 2.00%.

Share Consolidation

On June 1, 2026, the company announced the consolidation of its subordinate voting shares, multiple voting shares, and super voting shares at a ratio of 30-for-1, which was effective as of June 5^th. On the record date, the number of issued and outstanding Subordinate Voting Shares was reduced from 1,455,017,319 to approximately 48,500,577. Current shares outstanding as of 6/30/26 were approximately 54.4 million shares.

Valuation

We are maintaining our price target of $45.00 as we wait for further growth metrics and the closing of the most recent acquisitions. This valuation level represents meaningful upside potential from current levels. Our view is that once uncertainty related to the closing/integration of pending acquisitions fades (old and recent), VREOF’s improving fundamental story will increasingly resonate with investors, thereby driving a material upward revaluation for the stock. Vireo remains uniquely positioned to continue to roll up accretive assets, with further acquisitions likely representing incremental catalysts for the stock.

In addition, a more favorable regulatory backdrop (particularly as it relates to federal rescheduling or incremental state legalizations) and/or further acquisitions of strategically complementary assets at attractive valuations likely represent powerful catalysts for VREOF. Finally, insiders (including directors and executive officers along with investment vehicles managed by related party Chicago Atlantic) own approximately 40% of VREOF’s total capital stock, reinforcing strong management alignment.

Our DCF model suggests a wide disconnect between VREOF’s fundamentals and the stock’s current price. Key inputs include: 1) EBIT margin forecasts through 2026; 2) slowing EBIT growth through the end of the forecast period; 3) a 12.5% discount rate; 4) a perpetual growth rate of 5% despite sustainably higher growth rates for the foreseeable future; and 5) an exit EV/EBITDA multiple of 6.0x.

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HITI: High Tide Updates Q3 2026 Guidance, Which Exceeded Analyst Expectations

Tue, 11 Aug 2026 16:10:00 -0400

By Tom Kerr, CFA

NASDAQ: HITI

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Increased Guidance Announcement

On August 4^th, High Tide (NASDAQ: HITI) released updated guidance related to anticipated results for its 3^rd fiscal quarter ended July 31, 2026.

The quarter's new guidance highlights the growing earnings power of High Tide's global platform. Management expects to set new company records for revenue, gross profit and Adjusted EBITDA, with year-over-year growth of at least 30%, 27% and 43%, respectively. Notably, even the low end of guidance exceeds the highest current analyst estimate across all three metrics, suggesting current market expectations have yet to catch up with the strength, scale and operating leverage of the overall business.

This performance is driven by two increasingly powerful growth engines. In Canada, the company's bricks-and-mortar retail business returned to positive year-over-year same-store sales in June and sustained that momentum through July, a trend management believes compares favorably with broader market conditions and reflects the strength of its discount-club model. In Germany, Remexian set another all-time quarterly distribution record, shipping over 10 tonnes of medical cannabis, up 33% sequentially and 60% year-over-year. Together, these results point to a strengthening Canadian retail platform alongside a rapidly scaling German medical cannabis business, creating a more diversified and increasingly profitable global enterprise.

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CXW: Accelerated Share Repurchase Agreement Underscores CXW’s Confidence in its Outlook & Prospects

Tue, 11 Aug 2026 14:49:00 -0400

By M. Marin

NYSE: CXW

READ THE FULL CXW RESEARCH REPORT

Believe accelerated share repurchase agreement underscores CXW’s confidence in its outlook & prospects

CoreCivic (NYSE: CXW) has entered into an accelerated share repurchase (ASR) agreement with a financial institution to repurchase $500 million of its shares under its existing $755.8 million authorization. The company recently increased the authorization by an additional $500 million. Once the ASR is completed, CXW expects about $255.8 million will remain for share repurchases under the existing share repurchase authorization. Following a $500 million payment to the financial institution today, CXW expects an initial delivery of roughly 12.4 million CXW shares. The number of shares in total repurchased under the ASR, which is expected to finish prior to the end of 2Q27, will depend on market conditions and the price of CXW shares.

We believe this underscores the company’s confidence in its business outlook and prospects. It follows the company’s report last week of a 2Q26 beat that we believe illustrates the strong momentum in the company’s business and benefits of its growth initiatives. Following the substantial 2Q26 beat and ASR, CXW raised 2026 guidance.

Business momentum continues, with new business opportunities with ICE and other government partners

Moreover, the company continues to win new business and monetize assets while concurrently securing management contracts or strong prospects to secure management contracts to continue managing the facility. For example, CXW recently announced a new contract with ICE to utilize its 1,600-bed Prairie Correctional Facility, which had been idle since 2010. The company also announced the sale of the Prairie Correctional Facility, as well as of other assets that are purpose-built facilities designed specifically to support the needs of ICE and other government partners.

Consolidated occupancy level reached 78.4%, up from 76.8%

Reflecting new business, CXW’s consolidated occupancy levels in the company’s Residential segment improved to 78.4% compared to 76.8% in 2Q25. CXW expects occupancy levels to continue to rise and contribute to increasing operating margins over time. CXW expects further increases in 2H 2026 as demand from federal, state, and local governments increases. Occupancies were down slightly sequentially, as expected, reflecting external factors, but are expected to resume upward trends in 2H26.

In addition to higher ICE populations in recent quarters, the company’s operating results have also benefitted from higher federal and state populations and higher average per diem rates at many locations, combined with multiple new contracts coming online over the past few quarters. New business has closed at a pace the company has not experienced in some time, and CXW is also in discussions with ICE and other government partners for other contracts, including to reactivate additional idle facilities, as CXW still has additional idled capacity that it can bring back online. CXW has five idle correctional facilities containing ~7,000 beds as of March 31, 2026, and which are operated with a core staff in order to remain available to be reactivated quickly and which are being actively marketed as solutions to ICE and others. To fulfill new ICE contracts, CXW has already reactivated several idled facilities.

Reactivated facilities

2,560-bed California City Immigration Processing Center
2,400-bed leased South Texas Family Residential Center
600-bed West Tennessee Detention Facility
2,160-bed Diamondback Correctional Facility
1,033-bed Midwest Regional Reception Center in Leavenworth, Kansas
1,600-bed Prairie Correctional Facility in Appleton, Minnesota (potentially)

Believe asset sales, share repurchases, deleveraging + potential tuck-ins derisk CXW’s core business & likely lead to further share price multiple expansion

CXW completed the sale of several facilities to government partners and expects a 1-time gain of about $1.3+ billion in 2Q26. We view it positively that CXW has monetized these assets with little to no expected impact on cash flow. Separately, the asset sales de-risk CXW’s exposure to ICE somewhat, which we also view positively. Although ICE is funded through 2029, future administrations might not greenlight ICE detention spending at similar levels. Moreover, we view CXW’s diversification efforts now, while its book of existing and potential business is robust, as a positive aimed at enabling future growth opportunities.

Moreover, CXW is also engaged in discussions with ICE about potential sales of additional facilities. CXW facilities are purpose-built for the needs of ICE and other government entities. CXW facilities generally are modern and designed to provide services that could make them a turnkey solution for government agencies. It would not surprise us if CXW’s Prairie Correctional Facility were being considered under this model. We believe the cash infusion from asset sales, share repurchases, and deleveraging measures enables CXW to make additional tuck-in acquisitions in adjacent service sectors opportunistically, which is another positive, in our view.

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CBAT Targets New Growth Opportunities While Navigating a Complex Market Backdrop

Tue, 11 Aug 2026 14:33:00 -0400

By Brian Lantier, CFA

NASDAQ: CBAT

READ THE FULL CBAT RESEARCH REPORT

CBAK Energy Technology (NASDAQ: CBAT) has highlighted efforts over the past few months to position its business as broadly serving a variety of markets, including some new opportunities that present interesting potential upside. In June, the company redomiciled its business in the Cayman Islands, which does not impact the company's day-to-day operations but reduces some of the reporting requirements for a public company and should lower the cost and operational burden of being public. We are adjusting our presentation of our revenue and earnings estimates to reflect this change, as the company will now report six-month and full-year results.

The company has highlighted several opportunities for its cells in new and emerging markets, but the AI/Data center backup power market seems to be garnering the most investor interest, which seems appropriate given the size of the market that seems to grow daily. There will be several challenges for CBAK entering this market, but the company's long track record in delivering cells to the uninterruptible power supplies market should open some doors in the industry.

In late June, CBAK previewed its next-generation 26650 cells built for battery backup units at AI data centers. While there is some caution warranted whenever a company pivots to offer a new product in a large, rapidly growing market like data centers, this is a clear need in the market, and it appears that CBAK has been working to develop a product for this market for over a year, which gives us confidence that this move is more than just a press release.

The extreme power demands inside advanced data centers, with frequent and rapid starting and stopping, create significant swings in energy demand and strain energy distribution systems. These swings can shorten the useful life of existing battery backup systems. Additionally, data center racks are packed with increasingly advanced processors that have high power needs, causing data centers to reconfigure their power distribution networks and consider the space requirements of backup systems.

With this in mind, CBAK began working on new formulations and designs that would better manage the power fluctuations and deliver constant voltage during switching.

In particular, the company noted that the two new cells are built to provide four key advantages for backup use cases in data centers:

Managing AI Workload Surges

Backup power systems need to respond quickly when demand spikes to avoid interrupting AI Compute processes in the data center. The company noted that its two cells have roughly 2.5 times the discharge rate of standard cells, which delivers needed power faster during demand surges.

Reduce Interruptions

There are rare but potentially troublesome events in data centers during system switching or certain workload synchronization activities that can cause large power surges leading to disruption of the computing process or even a complete reset of the GPU. The company indicated that in test conditions its cells supported up to 100C pulse discharge (100x the battery's capacity), which the company characterized as acting like a shock absorber for the power system.

Reduced Thermal Stress

The company indicated that the new cells offer ultra-low internal resistance that reduces energy loss and heat generation. Ultimately, this is expected to lead to a more reliable backup system.

Increased Power Within Less Space

The company indicated that its new cells could have an output of 260 – 310 watts, which is 30-50% greater than standard cells in the market today with the same footprint. For data center operators, this means having more backup power without sacrificing precious rack space and requiring fewer overall cells.

At this point, CBAK has not announced any major contract wins or commercial installations of these cells, but given the market opportunity, this is certainly worth monitoring. With at least 100 GW of Data Center capacity under construction and our projection that every 20 MW of data center capacity could be a $1-$3 million revenue opportunity, it is clear that the addressable market for an advanced cell like CBAT's in the data center market is eye-popping. The company will be highlighting this opportunity through its participation in a virtual conference at the end of August, and the announcement of this presentation appears to have sparked renewed interest in CBAT.

Corporate Structure Update

As we noted earlier, the company completed a redomiciliation from Nevada to the Cayman Islands in June, with each common share converted into one share of the Cayman Islands entity. The company continues to trade on Nasdaq under the CBAT symbol, and as a result of this change, we believe that the company will shift to reporting half-year and full-year results only. We have updated our published estimates to reflect half-year results through June 2026 and through December 2026.

We are not adjusting our target valuation, which remains $1.50/share, but we believe CBAK continues to have a very compelling valuation while both of its business lines are on the verge of major upswings. Patient investors may have to wait through another quarter or two to see results, but the upside from these levels is significant if CBAK hits our goals in late 2026 and 2027. The stock has experienced a sharp rebound, jumping roughly 50% in the last week, as speculation has grown around its new cells for data centers. We think investors can look for selective opportunities to add to positions as this market develops.

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GCTS: GCT Semiconductor Q2 Revenues Slip

Tue, 11 Aug 2026 11:25:00 -0400

By Lisa Thompson

NASDAQ: GCTS

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GCT Semiconductor (NASDAQ: GCTS) missed second quarter expectations as customer orders slipped. Its 5G chipset shipments increased by 71% sequentially to over 5,100. Most of the product shipments were to four customers this quarter; the volumes were small, with three taking only about 1,500 5G chips each. Each of these customers is using these chipsets for a different application: fixed wireless access (FWA), aviation, mobile hotspot, and a push-to-talk phone.

We did not get the sequential revenue ramp we were expecting, but expect that next quarter will be better than this, but not by a lot. During the quarter, GCT had to prepay $7 million for wafer capacity at its foundries to ensure delivery of what it expected to sell in 2026. Going forward, it is expected to replenish that prepayment on a six-month rolling basis.

In June, GCT attended Computex Taipei and demonstrated a jointly developed converged gateway in MaxLinear’s booth. A converged gateway is a high-end FWA product that incorporates multiple inputs to deliver high-speed internet connectivity for enterprise customers. The product had high interest from four large customers: two in the US, one in Japan, and one in Europe. One in particular has a high probability of closing, and we could see a press release in Q3 or Q4. Having these first adopters will be beneficial in marketing to others in their industries.

During the call, management announced it had signed a new customer in the Unmanned Aerial Vehicle (UAV) space that provides products to consumers and defense companies. We expect a press release on this deal in the near future.

We are lowering 2026 estimates as orders push out, but have no reason to lower 2027 and 2028 numbers yet. We look to improving sequential results, new customer announcements, and new orders in the next few months, showing continued traction. We believe the stock is worth at least $3.40 based on $95 million in revenues in 2027.

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SNES: Revenue & Margin Improvements Align with Aims to Create Path to Profitability, Cash Flow

Mon, 10 Aug 2026 15:29:00 -0400

By M. Marin

NASDAQ: SNES

READ THE FULL SNES RESEARCH REPORT

Believe 2Q26 illustrates strong momentum on benefits of growth initiatives

SenesTech, Inc. (NASDAQ: SNES), a leader in rodent birth control solutions with patented products that provide proven long-term and sustainable rodent population management, reported record 1H26 revenue, which we believe illustrates the strong momentum in the business on benefits of its growth initiatives. Management remains focused on maintaining strong gross margins and disciplined cost controls toward attaining profitability and cash flow generation.

Management has transformed the company over the past year using a disciplined strategy designed to build long-term sustainable growth. The initial step was to strengthen its direct-to-consumer (DTC) business, including bringing the Amazon and Shopify operations under its direct control. SenesTech believes that strengthening its control of the customer channel improves its ability to capture more value and retain a greater portion of e-commerce economics as adoption of its growing product line expands. SNES has also redesigned the e-commerce section of SenesTech.com in order to improve the customer experience, simplify navigation, boost conversion rates, and support subscription growth, as well as refreshed its packaging to improve online and shelf visibility and strengthen the consumer understanding of what differentiates its product line.

The company believes its three growth priorities – 1) using e-commerce to build the Evolve and ContraPest brands, establish the category, and create a growing recurring revenue base, 2) growing B2B with both brands through a professional sales organization focused on targeted vertical markets, and 3) expanding the addressable market opportunity through new products, new services, and other initiatives – reinforce one another.

Substantial revenue & gross margin improvements align with key objective to develop clear path to profitability, growing revenues while concurrently lowering cash burn

Developing a clear path to profitability and growing revenues while concurrently lowering cash burn is a key company objective. The company’s strategy is to build a commercial model around direct consumer relationships, recurring revenue, greater control of brands and channels, and data analytics. Reflecting record levels of order count and subscription revenue as the subscriber base continues to grow, plus accelerating adoption of Evolve®, 2Q26 revenue advanced 56% quarter-over-quarter to a record $770k, compared to $493k in 1Q26, and 23% year-over-year compared to $625k in 2Q25. A greater than 3-fold increase in e-commerce revenue across online DTC and online B2B channels was a core revenue driver. E-commerce revenue came in at a record $511k in 2Q26, up 186% compared to $179k in 1Q26 and +206% compared to $167k in 2Q25. It was the first full quarter of in-house Amazon management, with SNES control over advertising, pricing, and channel economics, and Amazon revenue increased more than fivefold to a record $349k sequentially, up from $61k in 1Q026.

Record subscriber growth illustrated the ongoing expansion of the company's e-commerce strategy across both online DTC and B2B channels. Management expects e-commerce to play an important role in supporting future direct B2B growth. E-commerce revenue exceeded direct B2B revenue for the first time ever for SenesTech, reflecting the continued expansion of the online business. June was the strongest e-commerce month ever for the company, with e-commerce revenue of $206k, including Amazon revenue of $148k.

Combined subscriber count across Amazon and the SenesTech e-commerce website increased 117% to a record level at quarter end, which strengthens the recurring revenue base and increases revenue visibility. The Amazon channel was managed by a third party prior to February 2026. Revenue from the company's e-commerce website increased 31% quarter-over-quarter to $155k in 2Q26. DTC subscription revenue increased 89% to a record $104k and 142% year-over-year. The company believes these results demonstrate the benefits of the strategic decision to manage Amazon directly and the scalability of its broader e-commerce strategy. Subsequent to the end of the quarter, July e-commerce revenues reached a record $245k, up 19% from $206k in June, and subscription revenue reached a record $52k, up 22% sequentially.

Gross profit increased 68% quarter-over-quarter and 39% year-over-year, and the gross margin increased to a company-record 73.6% in 2Q26, compared to 68.5% in 1Q26 and 65.5% in 2Q25, reflecting improved channel mix, stronger direct-channel economics, and continued strength in the e-commerce business and a disciplined approach to costs. SNES reported a 2Q26 net loss of $1.8 million or ($0.35)/share, compared to $2.1 million ($0.87) in 1Q26.

SNES is enhancing promotional support & is optimistic about the traction it is seeing thus far

The changes management implemented have enabled SenesTech to boost awareness of the Evolve™ brand and educate the market, which is important as rodent fertility control represents a new pest management category. Controlling customer channels is also expected to help SNES establish credibility for its products towards the goal of generating recurring subscription revenue and gaining valuable customer insights that could inform marketing, product development, inventory planning, and commercial initiatives in the future.

SenesTech is optimistic about the traction it is seeing with its DTC and subscription measures. With a product portfolio expected to appeal to the consumer, professional, corporate, and government market segments, the company believes its recent initiatives support consumer revenue growth and also lay the groundwork for B2B (business-to-business) growth, which is a core goal for SenesTech. SNES’s investments in new initiatives and in digital marketing and building its brands are designed to support product adoption across targeted B2B verticals (see below).

With a growing portfolio of products and services, SNES believes the market opportunity for its products is significant and growing. SNES has hired a new Director of Marketing and believes it is well positioned to expand its digital marketing efforts this month, strengthening the platform to attract new customers, improve conversion rates and support long-term e-commerce growth to drive revenue growth. The enhanced promotional support is expected to boost awareness of SenesTech products and support both online and in-store retail sales. To best reflect its current commercial strategy across both consumer and B2B markets, the company’s strategy regarding marketing is to place greater emphasis on:

Sustainable rodent management
Environmentally responsible solutions
Long-term population management
Integrated Pest Management (IPM)
Effective, science-based alternatives that complement existing pest management programs

SNES’s B2B strategy encompasses increased focus on large-scale opportunities across targeted verticals as SNES now begins to accelerate the expansion of its B2B business through a professional sales organization focused on the eight key verticals where it believes Evolve™ and ContraPest® provide differentiated value. Management views the relationship between DTC and B2B as two connected important elements of its growth strategy and believes its initiatives and increased focus on large-scale B2B opportunities across targeted verticals strengthen its opportunity to grow across these sectors and also to grow its subscriber base and recurring revenue, which are also key objectives.

Strategic assessment services initiative to improve B2B customers’ understanding of infestations

SNES also expects to build an expanding database around successful deployments of its products and that, in turn, will enable the company to perform data analytics and support the launch of new strategic services. The company has expanded its offerings to include professional rodent population assessment services using trained field personnel, tracking technologies, and AI-supported analysis to better understand rodent activity and measure treatment effectiveness.

The company recently introduced assessment services designed to help B2B customers better understand the scope of rodent infestations and develop more effective long-term strategies. The new assessment services enable SNES to offer a more comprehensive solution and complement existing implementation and deployment services. SenesTech can help customers identify the most effective strategy for their situations, particularly as many organizations underestimate the scope and complexity of the problem.

By building a broad offering platform, SNES expects to position SenesTech as a trusted partner in rodent population management and develop additional recurring revenue opportunities. The company expects customers eventually to engage SenesTech for implementation services that include deployment planning, product placement recommendations, ongoing monitoring, and optimization.

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LOT: Buzzworthy New Launches Running Into a Complex Luxury Auto Market

Mon, 10 Aug 2026 11:29:00 -0400

By Brian Lantier, CFA

NASDAQ: LOT

READ THE FULL LOT RESEARCH REPORT

Lotus Earnings Preview

In mid-June, Lotus Technology (NASDAQ: LOT) announced that, to focus its resources on the acquisition of Lotus UK, the company would temporarily suspend reporting its first- and third-quarter earnings for 2026. The company will still report first-half and full-year 2026 results, but this shift in reporting periods may have caught some investors off guard, as most auto manufacturers report quarterly data and shifts in market demand can be identified quickly by investors. We anticipate that the company will likely report its first-half results by the end of August, and we will provide a full update at that time.

We remind investors that Lotus remains in the midst of a major repositioning of the brand and its products that will likely unfold over the next 5 years, and thus individual results in any single reporting period are less important than steady progress toward lasting profitability, which remains elusive for Lotus Technology.

Model Adjustment:

We are taking this opportunity to adjust both the presentation of financial data in our estimates and our expectations for 2026 based on the current luxury vehicle market in China and Europe (and to a lesser degree the US).

We are now forecasting sales of $241 million for the first half of 2026, down slightly from our previous forecast of $253 million ($113 million in Q1 and $140 million in Q2). The bulk of the adjustment comes from our assumption that the auto market in China remains hypercompetitive and demand for foreign luxury brands has been sharply impacted by strong demand for domestic luxury brands.

Our full-year revenue for 2026 is now $515 million, as a result of lowering our forecast for PHEV deliveries in the second half of the year from our previous forecast of $570 million for the year. Our EPS estimates are adjusted to reflect the suspension of quarterly reporting in June, so our first half EPS forecast is now ($0.34)/share and ($0.36)/share in the second half.

A more successful launch of the Eletre X in Europe or the Eletre BEV in Canada provides upside to these estimates, but given the challenging operating environment in China today, we think these estimates may have to be fine-tuned further.

For the time being, we are leaving our 2027 model unchanged with quarterly revenue and EPS estimates, as we assume the company will resume quarterly reporting after the closing of the Lotus UK acquisition.

The company has indicated that the Lotus UK acquisition remains on track for a 2026 closing, and we will further update our model to reflect the Lotus UK business when the acquisition is completed.

We encourage investors to review our full updated report which includes a detailed analysis of China’s luxury car market.

INDUSTRY UPDATE

The global luxury auto market remains relatively resilient in the face of persistent high interest rates and weakening consumer confidence in several markets, but the underlying market dynamics and brand preferences are worth discussing.

Luxury EVs in China - Perhaps the biggest shift in the auto market in 2026 has been the rapid emergence of Chinese luxury brands in China.

The perception that Chinese luxury vehicles offer a better relative value and contain superior technology has led to a meaningful shift in market share so far in 2026. While European brands like Porsche, BMW, Audi, and US-based Tesla are still major players at the high end of the luxury market, demand for domestic nameplates has led to sharply lower demand for the legacy brands.

Sales for Porsche were off 32% in the first half, while Audi and BMW both slumped close to 20% in the first six months of the year.

The prioritization of technology in the cabin, autonomous driving capabilities, media and connectivity options has driven much of this shift, where the domestic brands appear to have an advantage, while European brands remain largely focused on performance, which appears to be less important to the Chinese consumer. The overall luxury market (both domestic brands and foreign) saw shipments fall close to 20% in the first half, so while the shift in consumer preferences played a role, we also have to acknowledge that demand in general has weakened.

Even though Lotus is part of the Geely ecosystem and the majority of its cars are manufactured in China, we do not believe it is considered a domestic brand by most Chinese consumers. The fact that the company sells a high-end luxury vehicle likely insulates it a bit from this market shift, but we think it could be impacting BEV sales in China for Lotus.

Ultimately, it appears that the shift among luxury car buyers in China has been to place greater emphasis on the technology suite and less emphasis on the hood emblem or brand of a vehicle. This is a fairly significant shift and will require careful thought from leadership at Lotus to navigate this change. We feel that the technology offered by the Lotus line-up is very strong, but overcoming market perceptions may be challenging.

Within the Chinese market itself, several independently traded companies have seen their share prices underperform in the past 3 months, and the weakness of these stocks has likely had some impact on Lotus. Shares of XPeng, Li, and Nio have all fallen by 15-20% in the last 3 months as expectations for growth in the Chinese market have been tempered and margin pressure, particularly at the low end of the market, remains intense. The shift from a high-growth market to a more mature market with lower margins has likely impacted all of the companies’ shares in the space.

Another factor that could have impacted sentiment around Lotus’s shares in the past three months was the news that Polestar (NASDAQ: PSNY), another company in the Geely ecosystem (majority controlled but the Geely founder), would exit the US market after the US Commerce Department did not grant the company the ability to sell vehicles beyond 2027 due to the company’s use of connected vehicle technology developed in China. While Polestar has begun efforts to refocus its strategy on Europe, the impact on the company’s shares was meaningful, and we believe some investors have concerns that Lotus could also receive the same ban. Given that Lotus is not selling any of its China-made vehicles in the US (with the exception of a handful of Eletres), we do not view this as a real risk for Lotus, but it could have impacted the company’s share price.

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LGND: XOMA Acquisition Closed

Mon, 10 Aug 2026 09:27:00 -0400

By John Vandermosten, CFA

NASDAQ: LGND

READ THE FULL LGND RESEARCH NOTE

Ligand Pharmaceuticals, Inc. (NASDAQ: LGND) reported second quarter 2026 results boasting total revenue and income of $63.7 million, a 34% year over year increase. Adjusted core earnings per share (EPS) of $2.37 were also impressive, rising 48%. By line item, royalties rose 32%, and contract revenue increased by 161%. Captisol was the odd man out, with a revenue decline of 4% due to timing of customer orders. Since Ligand’s May financial update, the company has executed a $700 million convertible debt financing and closed its acquisition of XOMA Royalty Corporation. The financing deal brought quarter end cash and equivalents to almost $1.4 billion; however, the acquisition of XOMA was completed two weeks after the end of the quarter, leaving Ligand with a still impressive $700 million in cash and equivalents to continue its acquisition efforts.

Royalty revenue growth was driven by the usual suspects: Filspari, Ohtuvayre and Qarziba. After an anemic first quarter, contract revenue jumped by almost $5 million to $7.7 million. Captisol lagged, which management attributed to timing of customer orders. Adjusted net income per share was $2.37, increasing 48% over prior year levels. Revenue guidance and all of its components for 2026 remained the same as provided during the May update at $270 to $310 million. Ligand raised the low end of its 2026 adjusted EPS guidance to $9.00 from $8.50, resulting in a new range of $9.00–$9.50. The change is attributed to the cash interest generated from the zero-coupon convertible proceeds.

Ligand completed several other investments since its last financial update. This includes the second tranche of royalty financing with Orchestra BioMed of $15 million, a $3.3 million investment in Zerion Pharma supporting its Dispersome technology, and participation in an $85 million private placement along with Commodore Capital into Agenus and its BOT/BAL program.

2Q:26 Financial and Operational Results

Ligand reported second quarter financial and operational results disclosed in a press release and Form 10-Q filing with the SEC on August 6^th and 7^th, respectively. A conference call was held with an accompanying presentation to discuss results with investors following the release. For the quarter ending June 30^th, 2026, Ligand recognized revenues of $63.7 million. GAAP EPS for 2Q:26 totaled $2.22, and adjusted core EPS was $2.37, with the primary difference related to addback of share-based compensation expense, R&D funding expenses, and realized gain from short-term investments, partially offset by a gain from the change in fair value of investments. For 2Q:26 versus the same prior year period:

Revenues of $63.7 million rose 34% from $47.6 million, driven by strong growth in royalties. Intangible royalties grew 24% to $37.4 million and financial royalties grew 69% to $10.7 million. Ligand cites Filspari, Ohtuvayre and Zelsuvmi as primary drivers for revenue growth; however, the value of Zelsuvmi-related revenues is not disclosed. Captisol revenues fell 4% to $8.0 million. Despite the decline, management maintains visibility into sales over the next year and maintains its 2026 guidance of $35 to $40 million. Contract revenue and other income rose 161% to $7.7 million;
Cost of revenue, which is related to Captisol cost of goods sold, totaled $3.2 million, rising 11% over prior year levels. Captisol gross margin fell to 59.7% from 64.9% due to change in customer mix;
Amortization of intangibles was $8.1 million vs. $8.3 million;
Research and development expense rose 123% to $14.7 million versus $6.6 million. The increase was attributable to the research and development funding arrangement with Orchestra BioMed, which is required to be classified as R&D expense. This was partially offset by the absence of research and development expenses associated with Pelthos, which were present in the prior year period;
General & Administrative expenses were $29.1 million, up 44% from $20.2 million, with the change pertaining to transaction costs associated with the XOMA Acquisition, along with higher employee-related costs, including increased headcount and share-based compensation related to Ligand’s continued investment in its origination and portfolio management functions;
There were no fair value adjustments to partner program derivatives compared to a $1.3 million expense;
Total non-operating income was $55.7 million vs. $2.8 million. Material items include a $35.7 million gain related to change in fair value of equity method investments and $11.8 million related to gain from short-term investments. This category also includes net interest income, which totaled $5.6 million;
Income tax expense of $15.8 million represents a tax rate of 24.6%;
Net earnings were $48.5 million ($2.22 per share) versus $4.8 million ($0.24 per share). Adjustments to 2Q:26 GAAP earnings added $0.15 per share to generate core earnings of $2.37 per share.^[1] Material adjustments include the removal of the $1.67 gain on change in fair value of investments and the $0.55 gain from short-term investments, which were more than offset by addbacks for share-based compensation, R&D funding expenses, realized gain from short-term investments and amortization among other miscellaneous items.

As of June 30^th, 2026, cash, equivalents and short-term investments totaled $1,358 million. This amount compares to the $734 million balance held at the end of 2025. Free cash generated year to date totaled $72.5 million while cash from financing was $532 million related to the $700 million convertible issuance offset by debt issuance costs, stock repurchase, net hedging costs, and the net impact from employee stock awards. The company maintains access to a revolving line of credit^[2] and an at-the-market (ATM) facility with Leerink Partners that can expand access to capital as needed. Following the end of the quarter, Ligand closed the XOMA acquisition. Management noted that cash following the close was approximately $700 million.

0.0% Convertible Notes Due 2031

In June 2026, Ligand announced an offering of $550 million of convertible notes due 2031. Initially, the notes were expected to carry a coupon; however, after the bankers probed the market’s appetite, Ligand was able to place $700 million of convertible notes at zero interest. The capital raise closed on June 25^th, 2026. Net proceeds were $679 million after deducting fees and expenses. The conversion price for the notes is $334.27. Ligand may call the notes after September 2029 if the shares trade 130% above the conversion price for 20 of 30 consecutive trading days. The notes mature in September 2031.

Ligand executed convertible hedge transactions^[3] that offset dilution if the company’s stock moves above its conversion price of $334.27. The hedge purchased call options with a strike of $334.27 and issued warrants at an exercise price of $524.34 per share. The amount was sufficient to cover the entire 2.094 million shares that would be issued if the convertible note were in the money at expiration. The net cost of the hedge was $81.7 million. This structure avoids dilution from share price increases until Ligand stock exceeds $524.34 as the value of the calls increases along with the stock.

The financing, together with cash on hand and cash generation, enabled Ligand to fund the approximately $739 million XOMA acquisition with resulting cash levels around $700 million post transaction completion.

XOMA Acquisition

In an April 27^thpress release, Ligand announced that it would acquire XOMA Royalty Corporation (NASDAQ: XOMA) for $39 per share in an all-cash transaction. XOMA shareholders will also receive a Contingent Value Right (CVR) entitling the holders to 75% of any net proceeds that may result from pending Tremfya litigation with Janssen. The merger required cash redemption of XOMA’s preferred stock, repayment of loans, along with cash settlements of in-the-money options and certain warrants. The total value of the purchase was $739 million. It was funded through cash on Ligand’s balance sheet and proceeds from the recent convertible note issuance. Management issued a press release, Form 8-K, and slide deck accompanied by a conference call on the morning of April 27^th, 2026, which included relevant details of the transaction.

The deal closed on July 14^th, 2026 and is expected to be immediately accretive to Ligand’s earnings. As a result of the acquisition, 2026 revenue estimates increased by $25 million, and earnings per share (EPS) increased by $0.50 per share. Incremental operating profit from XOMA in 2026 is expected to be $20 million, offset by a $6 million hit to other income related to reduced capital deployment and acquisition-related capital costs. The entire revenue increase quantified in guidance will accrue to the Royalties segment, and there may be milestone revenues recognized in the back half of 2026. In the 2Q:26 slide deck, Ligand identified $2.3 billion of potential milestone opportunities. In 2027, earnings per share are expected to be incrementally higher by $1.50.

The acquisition brings more than 120 additional assets to Ligand’s portfolio. This includes seven commercial programs, 14 Phase III or registrational programs, and more than 100 earlier-stage assets. During the second quarter conference call, management noted that there had been several positive developments for assets they had originally valued at zero for the purposes of determining the XOMA purchase price. The opportunities emerged in the early and mid-stage pipeline. Other assets they have reviewed since the close demonstrate optionality, and the Ligand team believes that, with a few million dollars of investment, some of XOMA’s earlier-stage assets could be validated and advanced to the clinic. Lauren Hay, Ligand’s VP of Portfolio Strategy & Investments, highlighted 14 late-stage clinical programs, in addition to the seven commercial-stage programs previously shared.

Beyond XOMA’s revenue contribution, Ligand anticipates that it will be able to reduce costs. It has developed an investment team and infrastructure that can accommodate additional assets. Management expects that most standalone operating costs associated with XOMA can be eliminated. This is expected to contribute to the anticipated $0.50 in incremental earnings expected in 2026 and the $1.50 of incremental earnings in 2027.

XOMA also offers tax benefits to the combination. In its 2025 10-K filing, XOMA reported almost $200 million of federal and $23.5 million of state net operating loss (NOL) carryforwards. The use of these tax assets may be severely limited due to anticipated expirations in the 2030s and limitations on use due to change in control. There are also federal research and development (R&D) tax credits of $2.0 million and state (California) R&D credits of about $20 million. Ligand identified $110 million of tax benefits that it expects can be used over the next two to five years.

Following the convertible note capital raise, Ligand completed the acquisition of XOMA Royalty on July 14^th, 2026. Simultaneously, the company entered into an Amended Credit Agreement with Citibank, which continues to provide a $125 million revolving credit facility maturing in September 2028.

Zerion Pharma

On June 22^nd, Ligand invested $3.3 million in Zerion Pharma, consisting of $2.3 million for royalty rights and $1.0 million to purchase ordinary shares of Zerion. Zerion is a private company based in Copenhagen, Denmark. In connection with the Zerion Transaction, a convertible bridge loan previously issued to Zerion in April 2026 converted into ordinary shares of Zerion, resulting in the issuance of an additional $0.3 million of ordinary shares of Zerion to Ligand. Under the royalty agreement, Ligand is entitled to receive royalties equal to 11% of annual revenue up to $15.0 million and 1% of annual revenue above $15.0 million, subject to a minimum annual royalty payment of $0.3 million beginning in 2027.

Zerion is developing its Dispersome platform, which aids with drug solubility. The technology stabilizes drugs in their amorphous form by creating a drug dispersion within a protein-based matrix, which produces exceptional drug loading and enhanced dissolution. It relies on a novel class of protein-based excipients that allow poorly soluble small-molecule drugs to be formulated as stable amorphous solid dispersions with high drug loading. We have not yet had an opportunity to ask management about it; however, based on our review of Zerion, it appears that this technology could complement Ligand’s own Captisol platform.

Tzield

On April 22, 2026, Sanofi announced that the FDA approved its supplemental biologic license application (BLA) for Tzield. The approval expanded pediatric labeling for Tzield to delay onset of Stage 3 Type 1 Diabetes in patients eight years and older to as young as one year of age. The approval was granted under a priority review process and is supported by one-year data from the PETITE-T1D Phase 4 study, evaluating safety and pharmacokinetics in young children.

Filspari

Travere’s Filspari was approved in 2023 to slow kidney function decline in adults with primary immunoglobulin A nephropathy (IgAN) who are at risk for disease progression. It later submitted its supplemental New Drug Application (sNDA) for Focal Segmental Glomerulosclerosis (FSGS) in March 2025. The application was initially given a Target Action Date of January 13^th, 2026. However, just prior to this milestone, the FDA extended the review period.

In the weeks prior to the anticipated approval, the FDA made a series of information requests to clarify the benefit of Filspari in FSGS. While the responses were submitted prior to the agency’s decision, there was not sufficient time for the agency to properly review the data. As a result, the FDA delayed the Target Action Date by three months, classifying the additional data submission as a Major Amendment.

On April 13^th, 2026, Travere announced that the FDA had granted full approval for Filspari in adults and children aged 8 years and older with FSGS who do not have nephrotic syndrome. We do not explicitly forecast FSGS revenues in our model, but Ligand does include a component for FSGS revenues in their Pharm Team segment. In its Analyst Day presentation last December, Ligand estimates that the contribution from Filspari for FSGS will be an estimated $40-$45 million in 2030.

Travere is developing Filspari for other indications, including for post-transplant patients with recurrent IgAN. This is being done in the Phase IV SPARX study, which is expected to complete enrollment in the second quarter of 2026. Since the May update, Chugai announced that it filed a new drug application in Japan for sparsentan for the treatment of IgA Nephropathy. Chugai has a licensing and partner relationship with Travere through Chugai's acquisition of Renalys Pharma, securing regional rights to the kidney disease drug sparsentan.

Ohtuvayre

In January, Nuance Pharm announced that the National Medical Products Administration (NMPA) of China has officially accepted for review the NDA for Ohtuvayre (ensifentrine) for the maintenance treatment of chronic obstructive pulmonary disease (COPD). In 2021, Nuance Pharma entered into an agreement with Verona Pharma for the exclusive rights to develop and commercialize Ohtuvayre in Greater China (mainland China, Hong Kong, Macau and Taiwan). According to the NMPA website, the review timeline for drug marketing authorization applications is 200 days.

First quarter 2026 saw a sequential decline in Ohtuvayre revenues. Sales were adversely impacted by Medicare deductible resets and a CMS reimbursement change. Second quarter revenues achieved an all-time high, breaking with the first quarter hiccup. Ohtuvayre has gained attention in the COPD market, and competitors are noticing. In early July, AstraZeneca paid Sino Biopharmaceutical a $200 million upfront for ex-China rights to a late-phase challenger to Merck’s COPD drug. The deal, which includes up to $1.9 billion in milestones, covers Sino’s PDE3/4 inhibitor, TQC3721. The Chinese biopharma is working through its Chia Tai Tianqing Pharmaceutical subsidiary to advance a nebulized formulation of the drug candidate into Phase III development in China.

Agenus’ Botensilimab and Balstilimab (BOT/BAL)

In January, Agenus closed on its planned strategic collaboration with Zydus Lifesciences to commercialize botensilimab plus balstilimab (BOT/BAL) in India and Sri Lanka. The deal included upfront monies, an equity investment in Agenus, future milestones and royalties that will support the development of manufacturing capacity in the United States. In July, Agenus announced a private placement which included funds from Ligand, of $85 million in gross proceeds that will fund the ROBBIN trial of neoadjuvant BOT/BAL in microsatellite-stable (MSS) colon cancer. The deal included warrants that could raise an additional $255 million if they are in the money.

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________________________

^[1]^{Details of the GAAP to core earnings reconciliation are in Ligand’s earnings press release.}

^{[2] Ligand has access to a $125 million credit facility with Citibank, of which $124.4 million is available as of June 30th, 2026. In the 2Q:26 10-Q, the amended and restated credit agreement is included. It preserves a $125 million secured revolving facility through September 12, 2028, but recasts the documentation around the XOMA acquisition, Ligand’s larger convertible-note capital structure, and expanded subsidiary/collateral framework.}

^{[3] The option strategy employed is a Bull Call Spread defined here.}

Earth Science Tech (ETST): Diversified Healthcare Platform Delivers Another Profitable Quarter

Fri, 07 Aug 2026 13:35:00 -0400

By Brad Sorensen, CFA

OTCQB: ETST

READ THE FULL ETST RESEARCH REPORT

Earth Science Tech, Inc. (OTCQB: ETST) continues to demonstrate the benefits of its transformation into a diversified healthcare company, reporting another quarter of profitable growth while expanding the breadth of its vertically integrated healthcare platform. Rather than relying on a single product or service, ETST has assembled a portfolio of complementary businesses that span patient care, pharmacy services, telemedicine, healthcare management and consumer health products, positioning the company to participate in several of the fastest-growing segments of the healthcare industry.

The company's operating model is built around multiple synergistic businesses that work together to improve patient access while capturing value throughout the healthcare delivery process. ETST owns and operates specialty compounding pharmacy businesses that provide customized medications, telemedicine platforms that connect patients with licensed healthcare professionals, prescription fulfillment operations, healthcare clinics, and consumer health brands. This integrated approach allows the company to provide patients with a streamlined experience while generating recurring revenue from several points within the same healthcare ecosystem. As demand continues to grow for personalized medicine, virtual healthcare, and specialty pharmacy services, ETST believes its diversified platform provides an attractive foundation for long-term expansion.

That strategy continued to produce positive financial results during the fiscal first quarter ended June 30, 2026. Revenue increased to $9.0 million, compared with $8.8 million during the prior-year period, while gross profit improved to $6.3 million from $6.1 million a year earlier. More importantly, profitability accelerated at a much faster pace than revenue, with net income climbing 57% year over year to $715,697 from $456,714. Diluted earnings per share increased to $0.003, approximately three times the prior year's level, reflecting both higher earnings and the benefits of a reduced share count following the company's ongoing repurchase program.

Cash generation also showed meaningful improvement. Net cash provided by operating activities increased 108% year over year to $707,131, demonstrating that the company's earnings growth is translating into stronger operating cash flow. Management attributed the improvement largely to enhanced working capital management, providing additional financial flexibility to support future growth initiatives.

The balance sheet also continued to strengthen during the quarter. Total assets increased to approximately $10.4 million, while shareholders' equity rose to more than $7.3 million despite the company using cash to repurchase and retire over 3.7 million common shares. ETST remained free of long-term debt, a notable characteristic for a growing healthcare company, and management continues to deploy capital toward both expansion opportunities and shareholder-friendly initiatives such as share repurchases.

In conjunction with today's earnings release, Chief Executive Officer Giorgio R. Saumat stated that the first-quarter results demonstrate the continued success of the company's strategy of building a diversified, vertically integrated healthcare platform. He noted that management remains focused on disciplined execution, profitable growth, operational efficiency and expanding the company's healthcare ecosystem while continuing to create long-term value for shareholders. The CEO also emphasized that ETST's integrated business model enables the company to capitalize on multiple growth opportunities across pharmacy services, telemedicine and patient care rather than depending on a single revenue source.

Looking ahead, ETST appears well positioned to build upon this momentum. The combination of consistent profitability, improving cash flow, a debt-free balance sheet, expanding shareholder equity and an increasingly diversified healthcare platform provides a solid foundation for future growth. As telemedicine, specialty pharmacy and personalized healthcare continue to gain acceptance throughout the healthcare industry, Earth Science Tech has established a business model capable of participating in each of these expanding markets. With management continuing to execute its integrated growth strategy while producing improving financial results, ETST appears to be steadily strengthening its position as a profitable and diversified healthcare company with multiple avenues for long-term value creation.

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CCLD: With its Series B Preferred Redeemed and Merger Integration Costs Mostly Over, CareCloud Looks to EPS Growth Going Forward

Fri, 07 Aug 2026 12:27:00 -0400

By Lisa Thompson

NASDAQ: CCLD

READ THE FULL CCLD RESEARCH REPORT

CareCloud (NASDAQ: CCLD) had a productive quarter with the elimination of the Series B Preferred and replacing it with tax-deductible and lower-cost debt. This should be a big benefit to common shareholders in both cost and a simplified, understandable balance sheet. During the quarter, the company acquired Empower Healthcare and Compliance Partners, adding full-service healthcare compliance and advisory to its offerings and adding another cross-selling opportunity.

The company has had success with its new AI products.

CirrusAI is CareCloud’s AI-powered solution for real-time clinical documentation that turns complex patient data into actionable insights.

StratusAI is CareCloud's completely customizable 24/7 front desk agent that instantly turns missed calls into captured revenue while the customer can focus on more complex issues and delivering exceptional in-office care.

Coming later this year are three new products as shown below. The company is alpha testing these in their own service operations, and all have shown meaningful savings and accuracy.

While investors may have thought CareCloud’s Q2 results were weak, Q3 should show the typical strong seasonality combined with a full quarter of the preferred redemption. With revenue growth, a forecasted return to earnings growth, and a low valuation, this could be a good entry point in the stock.

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