Cantaloupe (NAS:CTLP) — mrkt cap $605mm; Price $8.29; EV/EBITDA 22
PASS. Cantaloupe is the leader in U.S.-based vending machine payment processing, commanding approximately 70% market share. As a first mover in integrating credit card processors into vending machines, it established strong relationships with major operators like Canteen and Sodexo, the largest providers of snack and beverage vending machines in the U.S. Over time, Cantaloupe has expanded its offerings, evolving from a payment processor to a vending management software provider. Cantaloupe is heavily tied to the vending machine and micro-store industries, both of which are relatively mature. Its growth will largely depend on either increased purchasing activity or capturing additional market share. However, competitors like Nayax remain aggressive with pricing and offer comparable solutions, adding pressure to the competitive landscape. While Cantaloupe is expected to grow subscription revenues at a ~10% clip, it does not justify the current valuation multiple. Thanks to subscriber Adi for bringing this name to our attention.
ZoomInfo (NYSE:ZI) — mrkt cap $3.4B; Price $9.98; EV/EBITDA 19
PASS. ZI is a leading provider of business contact and company information, specializing in acquiring and curating high-quality B2B data. However, ZI’s revenues have stagnated as low-cost competitors like Apollo and vertically integrated players such as HubSpot and LinkedIn continue to capture market share. Over the past year, ZI’s share price has declined by nearly 50%. For investors considering a company specializing in data, confidence in the uniqueness and durability of its data is critical—both of which remain uncertain for ZI.
LightPath (NAS:LPTH) — mrkt cap $135mm; Price $342; EV/EBITDA NA
MORE RESEARCH NEEDED. LPTH produces a specialized glass called “Black Diamond,” which is multi-spectral, allowing a broader portion of the electromagnetic spectrum to pass through compared to traditional lenses, such as those made with germanium. Traditional lenses require significantly more components to transmit wavelengths to a sensor. By enabling fewer sensors due to its superior transmission of “light,” this technology offers substantial advantages for missiles and drones in terms of cost and weight reduction. LPTH has announced a partnership with Lockheed and is competing with Raytheon for Army missile programs, with potential lifetime revenues of up to $1 billion from this contract. While the technology is proven, questions remain regarding LPTH’s ability to manufacture, assemble and deliver according to military standards. We will await further evidence of reliability before initiating a position.