Ekso Is Set to Conquer the Most Valuable Unstoppable Trend of All
Most investors consider themselves fortunate to latch on to one really big trend in their investing lifetime. But imagine what happens when you latch on to two, three, or even four…
… at the same time, with the same investment!
That’s the situation we’ve got right now with one of my favorite Total Wealth recommendations.
Not only is this going to dramatically increase the potential returns I envision, but also it may render them entirely too conservative. And that doesn’t happen very often.
By unleashing a new set of products drawn from their existing research and development that taps into a fourth unstoppable trend. So if the idea of triple-digit potential appeals to you like it does to me, pull up a chair.
What I am about to tell you could reshape labor markets and, in the process, create an entirely new group of millionaires savvy enough to cash in.
Here’s the scoop.
Last year I told you about one of the most inspirational companies I’ve ever visited, Ekso Bionics Inc. (OTC:EKSO).
At the time, the company was almost completely off the radar and totally unknown to both investors and analysts alike.
I promised you that wouldn’t be the case for long because the company had something other small start-ups didn’t: real products, real customers, and applications that potentially extended sales far beyond the medical and military markets it had initially targeted.
I also told you that the company would attract a lot more capital down the road once others saw the potential… as long as management continued to produce results.
I’ve italicized that word because good ideas are a dime a dozen. Over the course of 35 years of analyzing companies, I’ve seen more than a few seemingly great companies blow up because they couldn’t execute. For every Apple or Google, there are thousands of start-ups that didn’t make it.
That’s why I’m so focused on seeing what’s next. It’s also why I won’t recommend any company to the Total Wealth family without the potential to double in five years or less… at a minimum.
By all accounts, Ekso’s on track and producing results that make it more valuable by the day.
Here are a few key excerpts from last week’s earnings release:
- Year-over-year revenue growth is 54.55%.
- Ekso Labs just received its second government contract this year and is now working on its third U.S. government exoskeleton project.
- The company has had an additional three patents granted.
- The company’s first distributor is now fully certified and trained up.
- Ekso’s now sold and/or rented 125 medical devices to more than 90 customers, including 12 with multiple units on location. Of note, medical revenue is up 87%.
- Ekso is now field testing new proto types and has made several new key hires, including Tom Mastaler, the former head of global operations for Milwaukee Electric Tool Corp.
- And last but not least, the company turned in a net loss of only $4.1 million or $0.04 per share, versus a net loss of $81.8 million the same period in 2014.
It’s no wonder analysts are finally coming around. Though “falling all over themselves” is more like it.
Jeffrey Cohen of the 139-year old financial firm Ladenburg Thalmann, for example, described Ekso Bionics as “a jewel” and “a super company.” Houman Farahani of Torus Investment Research issued a “Buy” rating for Ekso on April 22, writing in glowing terms that Ekso was “at the forefront of the exoskeleton business” that’s expanding so rapidly.
Other analysts who joined in on the flurry of “Buy” ratings for Ekso that began two months ago have maintained their bullish outlook in the face of the volatility Ekso has seen this month – which, by the way, is perfectly normal for such a young small-cap, no matter how promising.
Torus Investment Research is predicting a 37.95% gain from yesterday’s close, while Ladenburg Thalmann projects a 142.3% surge. HC Wainwright, which issued its “Buy” rating on Ekso just yesterday, is forecasting 112.7% gains from yesterday’s close.
While these are healthy gains, they’re still a far cry from the $21.85 share price I envision for Ekso a few years from now. Turns out that while analysts are starting to catch on to what the Total Wealth community already knows about Ekso, they still don’t see the full picture.
For the first time, I can’t say I blame them. As I noted here, analysts typically have a myopic quarterly view that actually prevents them from looking several years in the future.
But no matter. Ekso has proven itself to be such an amazingly innovative and inspirational company that it’s flourished in some ways that very few people outside the Total Wealth family could have foreseen. The market will come to us.
So far we’ve touched on Ekso’s astonishing progress in both the military and medical sectors as part of the “Unstoppable Trend” in Technology. But now it’s making bold moves in a sector we’ve only touched on briefly before.
A new “Unstoppable Trend” is in play – and if Ekso conquers it as I think they will, I’ll be revising my profit forecast higher at a time when the company’s stock has already seen gains of 45% since I initially recommended it.
Amid Rosy Earnings, This Nod from the Military Could Double Ekso’s Revenue
There’s a lot to like from Ekso’s Q1/2015 earnings report released last week when you dig in. Revenue grew from $1.1 million to $1.7 million year-over-year – a 54.55% increase. Shipments are surging, the company is winning contracts and patents, and its customer base isn’t just growing – it’s also showing signs of becoming more loyal than ever.
Ekso passed the milestone of making 21 million steps possible last quarter, a 200% increase from a year ago. That speaks not just to improved sales, but also to a more devoted user base that is using the Ekso suits as intended, both clinically and safely.
Medical device revenue grew to $0.5 million, a whopping 87% increase. That’s fantastic news, because it’s evidence that Ekso is securing an ever-stronger hold on the “Unstoppable Trend” of Medicine. You may recall I made my initial projection on Ekso based on the belief that Ekso would capture just 25% of market share for medical instruments and supplies. With a few more quarters of stellar growth in this sector, that figure may prove conservative.
On the clinical studies front, the company is moving aggressively to ensure that exoskeletons become the new standard of care in gateway rehabilitation. Earlier this year, Ekso announced the beginning of its Pan-European Center Study – one of the largest, if not the largest, spinal cord treatment trial study ever conducted. Early results are reported to be promising – and this major study, combined with some smaller trial experiments, could well provide the medical community with the evidence it needs to make exoskeletons the new standard of care for traumatic bone injuries. That’s a market that’s projected to exceed $8 billion by 2020, according to iData Research Inc.
No wonder CEO Nathan Harding is pressing these studies so urgently, noting in prepared remarks for the quarterly conference call that, “We expect these studies to be instrumental in driving exoskeleton rehabilitation to become the standard of care for hospitals, rehab centers, and related institutions across the globe.”
In addition to these strides in Medicine, Harding also announced last week that the company has just received its second major U.S. military contract in 2015. And while they can’t release much information on the contract so far because it’s classified, Harding did reveal that with this deal, Ekso Labs is positioned to nearly double its revenue in 2015.
Even though we predicted this growth here at Total Wealth months ago, it’s still astonishing to watch.
Here’s where Ekso gets really interesting, and potentially a whole lot more valuable, too.
Ekso’s Moves in Construction Could Channel the Demographics “Unstoppable Trend”
Ekso has a new product coming out this year. It’s an exoskeleton that’s been dubbed the “Works,” and it could revolutionize a sector most people don’t associate with any of our Unstoppable Trends… but they should: construction.
Total Wealth readers already know of the amazing benefits that state-of-the-art exoskeleton suits can provide to our armed forces by boosting their speed, strength, and endurance to previously unimaginable levels. But the same potential applies to workers in almost every industry that involves physically intensive labor.
The “Works” is a suit that functions as a somewhat pared-down exoskeleton to be used for heavy lifting and to facilitate repeated use of industrial tools. It’s considerably cheaper than the rehabilitation and military suits, which can cost over $100,000. The “Works” is expected to sell for around $12,000.
Analysts have mentioned this new suit, but I haven’t come across any so far who seem to truly appreciate its potential. Russ Angold, Ekso’s chief technology officer, hit the nail on the head when he said that suits for industrial use could result in revenue that’s bigger and faster-growing than what the rehabilitation sector has provided so far… exactly as I outlined months ago in my initial review and write-up.
Angold recently provided a demonstration on Fox Business. The “Works” suit is unpowered – it requires no battery or electricity. It’s a systematic structure of metal joints that allows the weight of materials the workers are carrying to be absorbed and supported by the exoskeleton – not human muscle. It doesn’t just alleviate burdens for workers. It makes what they’re carrying, as Angold pointed out, weightless for all intents and purposes.
“The goal of these technologies is to increase worker productivity while at the same time helping to prevent injuries,” Mr. Harding said of the suit in last week’s earning’s conference. “The initial feedback we’re getting not only from potential customers but also from workers doing field testing is very exciting.”
They’ve already got prototypes being field-tested with potential customers, and they’re working with some of them on development projects for some very specific commercial uses. “The industrial opportunity is so large that if only one of our efforts in this phase comes to fruition, it could create a significant business” (emphasis added).
And Ekso’s moves to create suits for labor involving heavy lifting have huge ramifications for the construction industry. Construction is a sector that’s been projected by the GCP research firm at Oxford Economics to grow 70% by 2025, to reach $15 trillion in value. The biggest driver behind that growth is Demographics, which you’ll recognize as an offshoot of the Unstoppable Trend associated with Human Augmentation.
As the global population ages, infrastructure in every major American city will face big challenges. The Chartered Institute of Building (CIOB) projects that a third of the world’s elderly will live in housing that’s unsuited to their needs, and 70% of public transportation infrastructure will have to be remodeled and upgraded, along with approximately half of all pavements and roads worldwide.
What people don’t realize is that Demographics is also a very powerful influence on the supply side of the equation. According to the CIOB, the number of employees over the age of 60 in the construction industry is increasing more quickly than any other age group. With a higher and higher proportion of its work force being increasingly challenged by heavy loads, there’s enormous profit potential at stake for the company that develops a solution – like Ekso’s latest suit.
Obviously, I’ll be watching the situation closely. And if the “Works” suit comes even halfway close to meeting expectations in the construction industry, Ekso will soon be powered by a fourth “Unstoppable Trend,” after Technology, Medicine, and War, Terrorism & Ugliness.
In closing, I want to leave you with a statement from CEO Harding from the last earnings report that should make every investor who’s betting on Ekso for the long haul jump for joy:
“Our personal goal is to make exoskeletons ubiquitous – far beyond the conditions of personal injury – just like cell phones, microwaves, and plasma TVs have become.”
I have no doubt he’ll succeed.
Until next time,