RVSN DD (part 1)
Foreword
I found this stock on Dec 26th via a reddit pot by an account called Best Phone. I did some basic DD and then took a small first position at around 0.5 for 500 GBP
I am still actively buying the stock as i believe the company offers short and long term opportunity
The stock immediately started to go up so i looked deeper and invested more as i began to understand their position and the opportunity better
I am not affiliated with RVSN in any way and the this info is based on publicly available information and i have used chatGPT to organise thoughts and check some maths
✅ TDLR version
TLDR: Financial Overview of Rail Vision Ltd. (RVSN)
2019–2020: Stable liquidity with minimal debt until 2020, when leverage spiked to fund R&D.
2022: Strong recovery in liquidity and deleveraging efforts.
2023–2024: Transition to commercialization led to cash burn but signs of stabilization emerged in 2024.
✅ MY TAKE ON THIS
Starting with significant cash flow RVSN has embarked on a journey of RnD and whilst appearing to maintain strong liquidity for the most part and are now entering a potential inflection point which may start to come to light at the next EC (more on that later)
✅ Full info
- 2019 – Strong Liquidity and Minimal Debt
Liquidity: Current Ratio: 8.82 → Exceptional, indicating a very strong ability to cover short-term liabilities. Quick Ratio: 8.19 → Almost all current assets were liquid (e.g., cash or receivables), with negligible reliance on inventory.
Debt and Leverage: Debt-to-Equity Ratio: 0.13 → Low reliance on debt. Financial Leverage: 1.25 → Reflects a balanced and stable capital structure.
Revenues: Pre-revenue phase, primarily focused on R&D.
Key Takeaway: RVSN was financially stable, likely supported by early funding rounds.
- 2020 – Leverage Spike Amid Expansion
Liquidity: Current Ratio: 3.34 → Declined significantly, though still above the 1.0 safety threshold. Quick Ratio: 3.08 → Liquid assets remained sufficient to cover liabilities, despite the dip.
Debt and Leverage: Debt-to-Equity Ratio: 1.00 → Increased sharply, signaling significant reliance on debt or reduction in equity. Financial Leverage: 9.89 → A major spike, indicating the company was funding operations with substantial liabilities.
Revenues: No revenues yet, as R&D activities likely intensified during this period.
Key Takeaway: RVSN likely took on debt or other liabilities to fund operations and expand its R&D capabilities.
- 2022 – Recovery in Liquidity and Reduced Debt
Liquidity: Current Ratio: 6.45 → Strong recovery, reflecting improved liquidity management. Quick Ratio: 6.12 → Continued focus on maintaining liquid assets.
Debt and Leverage: Debt-to-Equity Ratio: 0.10 → Significant reduction in debt levels, showing effective deleveraging. Financial Leverage: 1.26 → Back to pre-2020 levels, highlighting stability.
Revenues: Still in pre-commercialization, with no meaningful revenue streams.
Key Takeaway: A strong financial recovery, likely driven by successful equity raises or repayment of liabilities.
- 2023 – Tight Liquidity as Commercialization Begins
Liquidity: Current Ratio: 1.76 → Dropped sharply, nearing the critical threshold of 1.0. Quick Ratio: 1.17 → Suggests tighter liquidity conditions, as liquid assets barely covered liabilities.
Debt and Leverage: Debt-to-Equity Ratio: 0.19 → Slight increase, though still low and manageable. Financial Leverage: 2.12 → A modest rise, reflecting early commercialization funding needs.
Revenues: Early commercialization efforts began, but revenue contributions remained minimal.
Key Takeaway: Cash burn intensified as the company began transitioning from R&D to commercialization.
- Latest Quarter (2024) – Signs of Stabilization
Liquidity: Current Ratio: 5.18 → Significant improvement, indicating a healthier liquidity position. Quick Ratio: 4.48 → Strong liquid asset base to cover liabilities.
Debt and Leverage: Debt-to-Equity Ratio: 0.04 → Minimal reliance on debt, showcasing financial discipline. Financial Leverage: 1.26 → Remained stable, reflecting sound balance sheet management.
Revenues: Some progress toward revenue generation, supported by partnerships and product approvals.
Key Concern – Book Value Per Share: Dropped to $0.15, indicating potential shareholder dilution or equity erosion.
Key Takeaway: Liquidity has recovered, but the company must focus on ramping up revenues and managing equity dilution risk