Here is our free report on icad for Ask Matt readers.

icad (ICAD) gets a Dan­ger­ous Rat­ing because of these RED FLAGs:

  1. Very Expensive valuation: current stock price implies the company will grow revenues at 20% compounded annually for the next 10 years while also improving ROIC from -3.7% to 1.5% within the same time frame.
  2. Option Liabilities: of $2.1mm or 3% of the current market value
  3. Asset-write-offs:  $4.4mm or 7% of Net Assets

All the details are in our report on icad. For the asset write-offs and their impact on eco­nomic earn­ings see Appen­dix 3 in our report. Our Risk/Reward rat­ing is on page 1.

See Appen­dix 4 to learn how  we cal­cu­late NOPAT and NOPAT Mar­gin for ICAD. See Appen­dix 5 for details on how icad’s Invested Cap­i­tal. Appen­dix 7 (in the Return on Invested Cap­i­tal sec­tion) shows how a neg­a­tive NOPAT Mar­gin and ter­ri­bly low Invested Cap­i­tal Turns result in a neg­a­tive ROIC (–3.7%) and neg­a­tive Eco­nomic Profit of $5.4mm while Net Income is neg­a­tive $2.0mm — dur­ing the last fis­cal year.

As per and , icad fits the pro­file of a good stock to sell.

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