January 11, 2023

Sell Remaining Procept BioRobotics (PRCT) For 40% Gain

I don’t love the action in Procept (PRCT) this week. While the broad market has been acting well and a lot of “risk on” stocks have gone up, shares of PRCT have headed south. The preliminary Q4 results released a couple of days ago were good, but not great (a slight beat). The stock’s inability to move higher – or at least stay flat – is a confidence crusher. My concern is that if anything looks iffy in Q1 2023 (Procept sold 28 robots in Q4 2022 for about $10.5 million and generated roughly the same amount in handpiece and consumable revenue, so a few robot system sales could be meaningful) management could issue conservative guidance on the official Q4 call, which would likely keep PRCT stock from rallying. On the flip side, I could be overthinking it simply because the stock has been down for three days. Still, in the current environment, I’m fine being cautious to protect a gain. Especially since I have a list of potential new purchases that are acting well right now. SELL REMAINING HALF

Tyler Laundon

Tyler Laundon is chief analyst of the limited-subscription advisory, Cabot Small-Cap Confidential and grand slam advisory Cabot Early Opportunities. He has spent his entire career managing, consulting and analyzing start-up and small-cap companies. His hands-on experience has taught Tyler that the development of a superior business model is the biggest factor in determining a company’s long-term success. Accordingly, his research focuses on assessing the viability of management’s growth strategies, trends in addressable markets and achievement of major developmental milestones.