Asset Breakdown
565 M
Assets Non Current
Goodwill
Tax Assets
Current Assets
| Total Assets | 600.76 Million | |
| Current Assets | 79.64 Million | |
| Assets Non Current | 565.04 Million | |
| Goodwill | 38.25 Million | |
| Tax Assets | 49.78 Million |
Should I exit my Aesthetic (USA Stocks:AIH) position?
 | By Rifka Kats | Macroaxis Story |
Buy low, sell high. That's the age-old adage in investing. However, for Aesthetic Medical International (AIH), a player in the Healthcare sector specifically under Health Care Providers & Services, it might be time to reconsider this principle. The company has been grappling with significant financial headwinds, as evidenced by its substantial EBIT loss of 72.5M and a negative cash flow from operating activities amounting to 75.1M. With a market valuation of just 0.65, far below its total assets of 546.4M, the firm's financial health appears to be in jeopardy. Aesthetic Medical International is set to release its earnings report today, with the forthcoming quarterly report anticipated on December 5, 2023. Currently, the Average Invested Capital of Aesthetic Medical is showing a downward trend compared to previous years. The company's current Market Capitalization is projected to rise to approximately $31.2 million, while its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is expected to drop to -$78.4 million. As some baby boomers express concerns about the healthcare providers and services sector, it is worthwhile to consider Aesthetic Medical International as a potential investment option. We will further explore why investors may still consider investing in this business.
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Reviewed by Raphi Shpitalnik
Aesthetic Medical International (AIH) has shown significant financial instability, with a total stockholder equity reported as a loss of $113.7M and a change in working capital also reported as a loss of $152M. This has resulted in a net invested capital of $152.8M, further emphasizing the company's financial difficulties. The company's EBIT is reported as a loss of $72.5M, indicating a negative operating income. With a last price of $0.65, the stock's performance has been highly volatile, as indicated by a standard deviation of 6.35. Given these factors, it may be time for investors to consider divesting from AIH.
Top Findings
Aesthetic Medical International carries a significant debt load of $393.1 million, with a debt-to-equity (D/E) ratio of 4.2. This suggests that the company may struggle to generate sufficient cash to meet all its financial obligations. On a performance scale of 0 to 100, Aesthetic Medical scores a mere 3. The company's Beta, a measure of market volatility, stands at -0.7598, indicating potential diversification benefits within a portfolio. As market returns increase, returns on Aesthetic Medical are expected to decrease at a much slower rate. In a bear market, Aesthetic Medical is likely to outperform the market. Our primary approach to predicting the future performance of any stock involves a comprehensive evaluation of the business, including its past performance and all available fundamental and technical indicators. By analyzing Aesthetic Medical International's technical indicators, we can currently assess whether the expected return of 0.25% will be sustainable in the future. Please consider Aesthetic Medical International's Jensen Alpha and the relationship between the Value at Risk and Kurtosis to make a swift decision on whether Aesthetic Medical's price patterns will revert.Aesthetic Medical financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Aesthetic Medical, including all of Aesthetic Medical's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Aesthetic Medical assets, the company is considered highly leveraged. Understanding the composition and structure of overall Aesthetic Medical debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Watch out for price decline
Please consider monitoring Aesthetic Medical on a daily basis if you are holding a position in it. Aesthetic Medical is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Aesthetic Medical stock to be traded above the $1 level to remain listed. If Aesthetic Medical stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Aesthetic Medical's Liquidity
Aesthetic Medical financial leverage refers to using borrowed capital as a funding source to finance Aesthetic Medical Intl ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Aesthetic Medical financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Aesthetic Medical's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Aesthetic Medical's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Aesthetic Medical's total debt and its cash.
Breaking down the case for Aesthetic Medical
The recent bullish price patterns experienced by current Aesthetic Medical Intl shareholders could raise concerns from traders as the firm is trading at a share price of 0.65 on very low momentum in volume. The company executives have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in October. The stock standard deviation of daily returns for 90 days investing horizon is currently 6.39. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Aesthetic Medical partners.
As Warren Buffet wisely said, "Be fearful when others are greedy and greedy when others are fearful." Aesthetic Medical International (USA Stocks: AIH) is currently in a precarious position, with a high probability of bankruptcy at 83.70%.The company's financial health is questionable, with a net debt of 380.9M and a net income reported as a loss of 94.2M. Furthermore, the company's total cash from operating activities is in the negative, at -75.1M, indicating a concerning cash flow situation. The company's return on equity is also negative, at -4.92, suggesting that the company is not generating a positive return for its shareholders. Given these factors, it may be time for investors to consider divesting from Aesthetic Medical International. The company's current financial performance and high bankruptcy risk make it a potentially risky investment. .
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