Thread by @BrianFeroldi

I bought a new stock this week

I think it has 10+ bagger written all over it

✅3+ revenue streams
✅Disruptive Technology
✅Founders involved
✅High Gross Margin
✅Massive TAM
✅Optionality

and it's only trading for ~10x sales!

Curious? ⬇️

The company is Vivos Therapeutics $VVOS

It has invented a breakthrough technology for treating sleep-disordered breathing / obstructive sleep apnea (OSA)

Which is a MASSIVE market

Leading cause of OSA is abnormal development of airway

This causes the airway to close during sleep

Closed airway = no oxygen = bad

Symptoms: Heavy snoring, poor sleep quality, headache, dry mouth, memory issues, depression

2x risk of stroke/ 5x risk of cardiovascular death

Gold standard treatment for OSA is a CPAP machine

keyword is ***TREATMENT***

CPAP doesn't stop the root of the problem -- it just puts air pressure in the throat to stop it from closing

but 35%+ of patients who try CPAP abandon it

Other treatments include $INSP's implantable device (which is gaining popularity)

And a few types of invasive surgery

$VVOS has a much better idea:

Why not RESHAPE THE UPPER AIRWAY

We already know how to RESHAPE TEETH -- we call them braces!

So Vivos created 3D braces/retainer that slowly fixes upper airway

This isn't experimental technology! It's on the market!

+FDA Approved in 2014
+Clinical data shows it works
+18,000+ patients already treated
+Covered by major insurers like BCBS, Unitet, Aetna, Cigna

What's really fascinating is $VVOS sales strategy

This is being sold through dental offices!

Why dentists? They "own" the patient's upper airway

The ADA has been encouraging OSA conversations with patients for years

The business model is awesome:

3 sources of revenue!

1⃣Dentists PAY VIVOS ~$28k to become a center
2⃣Sales of Vivos cases product
3⃣Software sales to manage the whole process for dentists

Why would a dentist PAY VIVOS to get started?

Offering Vivos can DOUBLE their practice's revenue without adding any new patients!

The payback is ~5 patients!

This is why 1,200+ dentists (<--important!) have already opted to offer it!

The margin profile on Vivos products are strong

Last quarter, Vivos consolidated gross margin was 81%

Now, 2020 was a tough year for Vivos

Kinda hard to sell this product when people are afraid to go to the dentist & they close down for months!

As a result, revenue only grew 15%

Not very impressive, right?

Explanation:

+Training revenue (bulk of sales right now) grew slowly
+Vivos was capital constrained -- went public in Dec to invest in their commercial team

If you look at device sales, they grew 56% to $4.5 MM

Not bad for a pandemic year!

In 2019, total sales grew 200%

Sales should accelerate meaningfully in 2021

+Newly hired commercial team ramping up
+Medicare coverage expected
+Dentist offies reopening
+New product launch to make diagnosing OSA easier/cheaper ⬇️

Dentist interest doubled from Jan 2020 -> Feb 2020

Valuation multiples when compared to other OSA stocks are very interesting:

To be clear:

This is a risky stock!

My plan, as always, is to buy in stages

Many thanks to Sreeni Herugu (@SHerugu) for bringing this stock to my attention!

But this is the slide that jumped off of the page at me

If you/your loved one had OSA, wouldn't you want to potentially cure it, not just treat it???

BTW, I pitched this stock on @MFIndustryFocus with @flippen_emily BEFORE I bought it

If you don't listen to Industry Focus...you are missing out!

fool.com/podcasts/indus…

Do NOT follow me blindly

I COULD BE WRONG ABOUT VIVOS!

This is a RISKY stock & it's <1% of my portfolio

Always DO YOUR YOUR OWN RESEARCH!

vivoslife.com/wp-content/upl…

dd7pmep5szm19.cloudfront.net/2457/000149315…

Twitter problem when I hit submit!

Please expand this thread to see the rest ⬆️

To channel my inner Tom Engle:

If $VVOS is the next great growth stock, a little is all I need

If it's not, a little is all I want

Several people have DM'd me about $VVOS management history

+CEO has few business failures in the dental industry
+Board restructuring due to widespread disagreement
+Material weaknesses in internal financial controls

I could be dead wrong here -- it's RISKY!!!!!!!!!!!!!!!

This is the great thing about sharing in public

Smart investors can bring up the bear case!