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aTyr Pharma Inc. Message Board

  • flyingdrew flyingdrew Jul 17, 2003 3:25 PM Flag

    Long term bull

    Trading at < 10X EBITDA, no debt, many growth options in front of it, dominates a fast-growing niche. Capex maybe a little higher than I'd like but declining as a % of sales.

    I just got bought a chunk of this company. Thinking of picking up more. I've only been looking at this for the past couple of weeks.

    What are the negatives or other positives re this company? I'm interested in having a fact-based discussion with any other serious investors.

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    • You are 100% correct! On all counts.

    • I'm pretty happy with my call a couple of months back.

      Expect the stock to find a trading range of $35-$40 until the next Q. At that point, if they can showing increasing rates of subscriber growth, there may be more upside to the $45 range.

      And I still rate this a long-term buy. At some point, this sector will become interesting to other health services providers, and they'll find Lifeline a nice, bite-sized oppty.

      But until then, the key is subscriber growth.

    • Lifeline is not a growth company; it is now a mature company. Its rate of growth, in terms of subscribers, declined from 7% in 2002 to 5% this year.

      See Lifeline's 10-Q for Augst 12, 2002:
      "Overall, the Company achieved a 7% increase in its monitored subscriber base to 356,000 subscribers as of June 30, 2002 from 332,000 as of June 30, 2001"

      One year later the increase is only 5%.

      See Lifeline's 10-Q for August 11, 2003
      "Overall, the Company achieved a 5% increase in its monitored subscriber base to 375,000 subscribers as of June 30, 2003 from 356,000 as of June 30, 2002."

    • Total revenue Q2 2003 was 8% greater than Q2 2002. Service revenue, which is the growth engine, was 15% greater. These are good growth numbers.

      The Company has been focused on operational improvement and on driving higher revenue per customer. They have been pretty successful at that -- and now they are turning emphasis back to driving a higher absolute customer growth rate, with a combination of new mktng programs. Included is more direct mktng, which I think is needed.

      You are right re: aggregate subscriber growth at 5%. That number needs to get higher; but I was comfortable with 15% service revenue growth.

      The next 3-4 quarters are key for the company to prove it can drive higher subscriber growth. If it can, expect a strong move up in the stock. I believe current EV of 7-8X EBITDA does not price in much growth..

    • Lifeline is a great company that provides a valuable service to the very elderly. Unfortunately Lifeline's service is not scale-able, as they add more customers they have to add more monitors, which in turn increases costs. Also Lifeline has to replace their entire customer base on a regular basis due to customers either passing away or moving to a nursing home. Although Lifeline does dominate its niche I think it is too expensive at this level.

      • 1 Reply to erivanyo
      • Looks to me as though they're scaling okay...they've grown their EBITDA to 22% in the last FY and have been keeping capex flat at an absolute level over the last few years.

        And I wouldn't be too worried about lack of scale in operations. I think there is some, but there is likely more scale in sales and marketing -- these guys have a chance to be the dominant brand/company in this space.

        The population is aging and technology should allow more and better products -- like a sensor that can go off if a fridge isn't open for a few days. Things that could be great for livealone elders.

        I would like to see these guys nudge up the growth rate. Seems like a pretty conservative mgmt team. That's why my Buy isn't a strong buy.

    • i'd agree with your bullish feelings - company looks well-run and dominates the markets/marketshare - a definite recommend BUY.

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