A weak short-term cash flow profile and an otherwise early stage of business development increase business risk, which you somehow left out of that screenshot (?). It is intentionally right next to that valuation risk; the intention is that these metrics together provide a comprehensive picture of the company’s risks.
This image thus tries to communicate that Aiforia’s business risks are high, while valuation risks are a notch more moderate than business risks but by no means low. Valuation risks are increased by the imprecise determination of the company’s fair value (here, our risk parameter is at its maximum) and, on the other hand, lowered by the generally reasonable valuations on our stock exchange and the stock’s pricing in the lower half of the fair value range.
Valuation risk naturally also considers the need for financing, but as mentioned in the report, I don’t see this as a particular concern given Aiforia’s track record so far – the company is currently quite sovereignly taking over the clinical pathology market in Europe (the US market is not progressing much in the big picture).
The negative scenario is roughly achievable without winning new customers, though it requires retaining existing customers and their expansion. I wouldn’t seek a comparison for the profitability of a nearly pure-margin (70-90%) software business from the averages of an industry-heavy stock exchange.
We certainly agree on this! If one looks at the fair value range (1.1-8.0 e/share), it is clear that the range of outcomes is still wide.
Compared to early-stage companies, Aiforia already has more concrete business: ~10-15 significant clinical segment customers have been won in a sector where deals and suppliers change slowly. This means that commercialization risks have already been significantly reduced compared to a situation where there would only be technology and an attempt to find a path to commercial agreements.