Cleantech Co. is Grossly Undervalued, Says Analyst
Research Report

1. BioLargo Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of BioLargo Inc.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

Disclosures for Singular Research, BioLargo Inc., August 30, 2024

The following disclosures relate to relationships between Singular Research and Millennium Asset Management, LLC (“Millennium”) and companies covered by Singular Research and referred to in research reports. This report has been prepared by Singular Research, a wholly owned subsidiary of Millennium which is an investment advisor registered in the State of California. Singular Research receives fees from Millennium for the right to use and distribute research reports prepared by Singular Research. Millennium does and seeks to do business with companies covered in Singular Research’s research reports. Millennium may receive fees from issuers that are the subject of research reports prepared by Singular Research for investor and public relations and other marketing-related services provided to such issuers by Millennium. As a result, investors should be aware that Singular Research and Millennium may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

General Disclosures This research report is for our clients’ informational purposes only. This research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. Any opinion expressed in this report is subject to change without notice and may differ or be contrary to opinions expressed by other professionals or business areas of Singular Research or Millennium. We are under no responsibility to update our research. The views expressed in this research report accurately reflect the responsible analyst’s personal views about the subject securities or issuers. No part of the analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that analyst in the research report. Millennium and its affiliates, officers, directors, and employees, excluding analysts, will from time to time have long or short positions in, and buy or sell, the securities or derivatives thereof of covered companies referred to in our research reports. Our affiliates, officers, and directors will not execute on any new recommendation or recommendation change until 48 hours after the dissemination of the report. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.

BioLargo Inc. (BLGO:OTCQX) reported its Q2/24 financial results, the highlight of which was revenue growth, reported Singular Research analyst Gowshihan Sriharan in an August 30 research note.

"BioLargo is an innovation and development company experiencing rapid revenue growth, doubling revenue in each of the last two years," Sriharan wrote.

"Significantly Undervalued" Stock

The analyst pointed out that despite BioLargo delivering a 35% return year to date, it "remains significantly undervalued." It is trading at the time of this report at about US$0.25 per share.

This compares to Singular's US$0.36 per share 12-month price target on the cleantech company, down from US$0.45 previously.

The difference between the current and target prices implies a potential return for investors of 44%.

"We see significant upside potential in BLGO shares," wrote Sriharan.

The company remains a Buy.

Positive Cash Flow Continues

Sriharan presented BioLargo's Q2/24 results.

Revenue was US$5 million (US$5M), 7% higher than Singular's estimate of US$4.69M. Also, Q2/24 revenue was up 247% year over year and 5% quarter over quarter (QOQ). Nearly 70%, or US$3.5M, of the total revenue, came from sales of Pooph, BioLargo's line of odor control products, first distributed in 2022 via Walmart.

The company had its second consecutive quarter of positive cash flow in Q2/24. Operating cash flow was US$330,000. Also during the quarter, the sale of 454,547 shares generated US$152,000 in gross proceeds. BioLargo's cash balance at quarter's end was US$4.7M.

The company's Q2/24 gross margin was 46.2%, down QOQ by 60 basis points. This drop was due primarily to higher raw material costs and a less favorable sales mix, noted Sriharan.

As for costs, total operating expenses in Q2/24 were US$3M because of sales, general and administrative (SG&A) and research and development (R&D) expenses. The SG&A expense was 8% higher QOQ at US$2.4M. The R&D expense, though, was 20.5% lower QOQ, at US$620,000.

For the quarter, BioLargo posted a net loss of US$780,000 or US$0.01 per share.

Revenue-Boosting Opportunities

Sriharan briefly discussed the various enterprises BioLargo is advancing and commented, "We are bullish on BioLargo's long-term prospects."

As for Pooph, management expects about US$20M in full-year 2024 revenue from it, reflecting a 20% QOQ growth rate. The recent debut of new Pooph products and the addition of Target and Ralph's to retailers carrying the products should boost sales growth.  

"Pooph is a hit with consumers," Sriharan wrote.

BioLargo's PFAS remediation business could boost revenue, too, noted Sriharan. The company's first project, for a New Jersey municipality, is in progress, and completion, expected in November, will be a major milestone. Also, BioLargo is bidding on other PFAS remediation projects for prospective industrial and municipal customers. Management estimates this line of business to be a US$17 trillion opportunity.

"BioLargo has developed a patented AEC technology that stands out as one of the rare commercially accessible solutions capable of reducing PFAS concentration in drinking water to undetectable levels," explained the analyst.

Regarding Bioclynse, the surgical wound irrigation solution product of BioLargo subsidiary, Clyra Medical Technologies, it is nearing commercialization. A next step is selecting a distributor.

Also, BioLargo continues developing its battery technology, with testing and manufacturing of its sodium cells having begun. Management's ultimate goal with this venture is to sell battery factories, not the batteries themselves.