Saw a post on $RMTI here yesterday and did some digging myself. This is one of the most assymetric bets I’ve seen and I believe we are on the cusp of breakout. The play is simple:

• Price growth and margin expansion, which are essentially programmed into their contracts, are not being priced into the stock

• This is due to concerns of contract expiry with major customer DaVita; but chances are DaVita will renew their contracts as they own a stake in RMTI, DaVita has bad blood with the only other alternative, Fresenius, so they have no choice but to renew RMTI’s contract

• Monthly reported sales run-rate was $10m in July, yet street only expects $26.5m sales for Q3. Street is likely also lowballing margin forecasts, expecting it to be flat/down. This is highly unlikely since contracted price hikes provide operating leverage and sequentially margin expansion. From this alone, they could easily beat estimates by 15-20%

• Tomorrow’s earnings will likely be a major catalyst: expecting a huge beat on sales and earnings announcements of contract renewals announcements of new contracts management discussion of new high-margin product line

Even without any multiple expansion, RMTI could hit north of ~$7 quickly and head towards $8-9 within a year. Slamming the table on this one, just got in at $4.75.