KMTS Stock: This Medtech Grew 66% and Fell 8% — Here’s Why

KMTS Stock: This Medtech Grew 66% and Fell 8% — Here’s Why

Kestra Medical Technologies (KMTS) Q4 FY2026 — Kestra Medical grew fiscal Q4 revenue 66% to $28.6M (FY26 +59% to $95.1M) and expanded gross margin to 54.8% — its 10th straight quarter of gains — but its adjusted EBITDA loss widened to $27M, EPS missed, and it guided FY27 revenue to $137M (+44%, a deceleration). The stock fell ~8.5% to ~$22. Kestra makes the ASSURE wearable defibrillator and is the challenger to ZOLL's LifeVest in a two-player market — growing 59% while the market grows low-to-mid teens, so it's taking real share. The equity story is a gorgeous gross-margin ramp (40.5% to 54.8% in a year, targeting 70%+). So why did it fall 8%? The loss WIDENED (adj. EBITDA -$20M to -$27M), the guide decelerated to +44%, and management gave no path-to-breakeven date. At ~8x forward sales after the drop, it's a reasonable price for the growth — a SPECULATIVE BUY, with the risk that losses take longer to inflect than hoped. THE CALL: SPECULATIVE BUY (3/5, GREAT TOP LINE, UNPROVEN BOTTOM LINE) — base-case value ~$27 vs ~$22 today. What to watch: the first sign losses are inflecting (a narrowing EBITDA loss or a breakeven date), the collections/in-network conversion rate, and the share count Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

AEHR Stock: The AI Burn-In Company Just Guided to Triple — Is It a Buy?

Aehr Test Systems (AEHR) Q4 FY2026 — Aehr Test Systems beat on its fiscal Q4 (revenue $18.8M, +34%; non-GAAP EPS $0.11 vs a small expected loss), posted record bookings of $60.7M and a $100.6M effective backlog, and guided fiscal 2027 revenue to $130-150M — 160-200% growth. The stock rose ~6% to $72. Going into the print, Aehr was the classic story stock: 52x sales, falling revenue, and no FY27 number. The print knocked down all three pillars of the bear case at once — it guided $130-150M (160-200% growth), Q4 gross margin recovered to 43%, and it fired the dilution gun (raised $97M, now $116M cash and no debt). So it's no longer a business-quality call, it's a valuation call: ~16x forward sales but ~84x forward earnings after a 5x run. Notably, the Street's $62 targets are stale (set pre-guide) and almost certainly headed up. A constructive HOLD. THE CALL: HOLD (3/5, THE STORY GOT REAL; SO DID THE PRICE) — base-case value ~$72 vs ~$72 today. What to watch: the gross margin holding as Sonoma scales, fiscal 2028 bookings (the encore customer), and the analyst upgrades likely coming after this guide Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

AERO Stock: Aeroméxico Posted Record Revenue — and Still Lost $58 Million

Grupo Aeroméxico (AERO) Q2 2026 — Aeroméxico posted a record second-quarter revenue of $1.479B (+12.6%) on capacity up just 1.9% — and still swung to a $58M net loss, as jet fuel expense jumped 79.9% to $494M. The stock fell 8.5% to $15.30, now 25% below its November IPO price. Aeroméxico's board policy permits hedging 40-60% of its jet fuel. It has hedged ZERO for six straight years — and this was the quarter fuel doubled. But the fuel shock isn't the real story: Delta ate the same 75% fuel spike and still earned $1.4B pre-tax. Aeroméxico's $68M of operating income didn't cover HALF of its $136M interest bill. Fuel was the trigger; the post-Chapter-11 balance sheet was the loaded gun. Meanwhile it trades at ~3.4x EV/EBITDAR vs 5.6-6.6x for Copa and Volaris, with an Eleventh Circuit ruling on the Delta joint venture due any day and a Volaris-Viva merger that would control ~69% of Mexican domestic traffic. Our base case: $21.50. THE CALL: SPECULATIVE BUY (3/5, A LEVERED BET ON JET FUEL) — base-case value ~$21.50 vs ~$15.30 today. What to watch: the price of jet fuel, the Eleventh Circuit ruling on the Delta joint venture, and whether management finally announces a fuel hedging program Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

DAL Stock: Delta Posted Record Revenue and Beat — So Why Did It Fall?

Delta Air Lines (DAL) Q2 2026 — Delta posted record adjusted revenue of $17.7B (+14%) and beat with adjusted EPS of $1.56 — but EPS fell 26% YoY on the highest quarterly fuel bill in its history, it affirmed rather than raised full-year guidance, and the stock slipped ~2% after a 76% run to record highs. Delta is no longer a commodity airline — premium cabins now out-earn the main cabin, the American Express deal pays $2.4B a quarter, and relentless deleveraging earned an investment-grade rating from all three agencies (plus a 15% dividend hike). But after a 76% run to a record $95.68, it trades ~13-14x, and our owner-earnings DCF lands ~$90 vs the ~$87 price. A quality-airline-at-a-fair-price HOLD. THE CALL: HOLD (3/5, QUALITY AIRLINE, FAIRLY VALUED) — base-case value ~$90 vs ~$87 today. KEY METRICS: - June qtr 2026: adjusted revenue $17.7B (+14%, a record; GAAP $19.76B); adjusted EPS $1.56 (beat ~$1.49, but -26% YoY); GAAP EPS $2.44 - Adjusted operating margin 8.8% (down from 13.3%) — the decline was entirely a fuel-cost problem - Fuel $3.93/gallon (+75%, highest quarterly fuel expense in company history); guided to ~$3.15 next quarter (easing) - Premium-cabin revenue +17% (now exceeds main cabin); Amex remuneration $2.4B (+16%, 7th straight double-digit quarter); diverse revenue 61% of total - Unit revenue (TRASM) +12% on just +1% capacity; free cash flow $209M in Q2, $1.4B H1; FY26 FCF target $3-4B - Adjusted net debt down ~17% YoY (~$3B); investment grade at all three agencies; dividend raised 15%; ROIC 10.9% - Guidance: FY26 adjusted EPS $6.50-7.50 AFFIRMED (not raised); Q3 adjusted EPS $2.00-2.50 (a return to YoY growth) - Valuation: stock ~$87 (down ~2% on the print), up 76% in a year, record $95.68 on July 2; ~13-14x forward P/E; market cap ~$58B - Owner-earnings DCF (base ~$3.8B FCF, +2%/+5%, 9-11%): ~$90 fair value vs ~$87 price — essentially in line; the key risk is cyclicality What to watch: the jet-fuel price (the swing factor), unit-revenue (TRASM) trends, and the free-cash-flow generation that funds debt paydown and the dividend Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

NRIX Stock: Nurix Tripled After a $700M Roche Deal — Is the Good News Already Priced In?

Nurix Therapeutics (NRIX) Q2 FY2026 — Nurix Therapeutics reported a fiscal Q2 net loss of $(0.81) per share on ~$9M of collaboration revenue — but the story is the June Roche partnership on its BTK degrader bexobrutideg ($700M upfront, up to $2.3B), which lifts pro-forma cash to ~$1.14B and has driven the stock ~200% off its lows to near $25. Nurix is a clinical-stage protein-degradation biotech with no product revenue — so we value it on cash + deals + pipeline, not earnings. After the transformational Roche deal it has a ~$1.14B pro-forma cash fortress (covering ~45% of its market cap), a 50/50 US stake in a validated BTK degrader, and wholly-owned pipeline optionality. But after a triple to 52-week highs, our sum-of-the-parts lands ~$26 vs the ~$25 price — de-risked, but a speculative HOLD. THE CALL: HOLD (3/5, DE-RISKED, SPECULATIVE) — base-case value ~$26 vs ~$25 today. KEY METRICS: - Q2 FY26: collaboration revenue ~$9M; net loss ~$(89.5)M, or $(0.81)/share; R&D ~$88M; burn ~$90M/quarter - Cash $443.5M at quarter-end (pre-Roche); pro-forma ~$1.14B including the $700M Roche upfront (lands next quarter); no debt - Roche deal (June 2026) on bexobrutideg (BTK degrader): $700M upfront, up to $2.3B total, 50/50 US co-develop & profit split, tiered ex-US royalties - Pipeline: bexobrutideg (Roche-partnered, pivotal Phase 2 + Phase 3); NX-1607 (wholly-owned oral CBL-B IO) + a second wholly-owned degrader - June EHA data: response rates in the 80s-low-90s% in relapsed CLL/SLL with encouraging durability — the validation that drew Roche - Additional partners: Sanofi (STAT6, milestone this quarter), Gilead (IRAK-4, Phase 1), Pfizer (degrader-ADCs) - Market cap ~$2.5B; enterprise value ~$1.35B pro-forma; stock ~$25, up ~200% off the lows, near 52-week high ($25.08) - Analysts: ~15/16 Buy, average target low-$30s (~25-30% upside), high $45, low $25 - Sum-of-the-parts (cash + risk-adjusted deal + pipeline): base ~$26 vs ~$25 price — roughly fair; the risk is binary clinical-trial outcomes What to watch: the bexobrutideg pivotal (Phase 3) trial data, the two wholly-owned pipeline programs (NX-1607, second degrader), and any new pharma milestones Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.