Emerging Growth Stocks (Briefing.com)

Breaking down this weeks additions and news on RUM

There were three key additions to the emerging growth stocks list on Briefing.com ( MIND SKYT and WAY)

Lets take a quick look at each.

MIND Technology (MIND) specializes in providing advanced technologies for industries such as oceanographic research, hydrography, defense, seismic exploration, and security. Its Seamap division focuses on delivering high-performance marine exploration and survey equipment. Though a small company, MIND is experiencing robust growth. In Q3 (October), revenue soared by 143% year-over-year and increased 21% sequentially, reaching $12.1 million. The company attributes this growth to favorable macroeconomic trends and strong customer engagement, which have driven order volumes and operational improvements.

Starting Q4 (January) with a backlog of $26.2 million, flat compared to Q2, MIND emphasized its ability to manage substantial order deliveries during Q3 while securing new business to sustain momentum. This balance between fulfilling orders and securing future ones contributed to its sequential revenue growth. The company projects this pattern to persist, backed by an active pipeline of pending and potential orders that collectively exceed twice its current backlog. Encouraged by steady demand and customer engagement, MIND anticipates further revenue growth in Q4 and remains optimistic about its trajectory into FY26. Following the Q3 report and positive commentary, MIND's stock has risen significantly. However, due to its small size and the unpredictability of its order flow, caution is warranted.

After a prolonged downtrend, MIND started to base out sideways in 2023 and has gone sideways for the last two years (weekly chart). The recent report resulted in a very high volume burst higher in price, trying to push the stock out of the 2-year channel. Is this report enough to kick the stock into a stage 2 uptrend?

SkyWater Technology (SKYT) operates as a U.S.-based semiconductor foundry, providing both advanced semiconductor process technology development and wafer manufacturing services. As a pure-play semiconductor contract manufacturer, SkyWater supports clients across markets such as aerospace and defense, automotive, biomedical, industrial, and quantum computing. Established in 2017 after being spun out of Cypress Semiconductor, SkyWater predates the CHIPS Act and the renewed focus on domestic chip manufacturing. Its Advanced Technology Services (ATS) business serves as a monetized R&D platform, allowing the company to collaborate with customers during early product development stages, with the capability to transition seamlessly to volume production in the same facilities.

SkyWater has gained momentum recently, driven by its role in the movement to bring chip manufacturing back to the U.S. The stock saw a boost after announcing a preliminary memorandum of terms (PMT) valued at up to $16 million through the CHIPS for America program. This funding, coupled with customer-funded capital expenditures totaling $320 million through 2026, aims to enhance production at its Minnesota facility. SkyWater exemplifies the shift toward strengthening domestic semiconductor supply chains, reducing reliance on overseas foundries.

Similar to MIND, SKYT has been in a sideways channel for an extended period of time. However, on 12/17 and 12/18 the stock shot higher on super heavy volume on the back of the quantum computing hype. Again, if this holds above the breakout level, does it have enough to keep pushing higher?

Waystar (WAY), which went public in June 2024, offers software designed to streamline healthcare payments, enabling providers to focus on patient care. Serving around 30,000 clients, including 18 of the top 22 U.S. healthcare institutions, Waystar processes over 5 billion transactions annually, covering $1.2 trillion in gross claims and impacting about 50% of U.S. patients. The company’s cloud-based platform connects providers, payers, and patients, enhancing efficiency, timeliness, and transparency in the payment process.

In Q3, Waystar reported 22% year-over-year revenue growth, reaching $240.1 million. This performance was driven by high client retention (109%), successful cross-selling, new client acquisitions, and modest price adjustments. Partnering with Google Cloud, Waystar is exploring generative AI use cases to further automate and optimize payment workflows. With revenue projected to approach $1 billion in 2025, the company also boasts a strong adjusted EBITDA margin of 40.3%, despite a slight decline from the prior year. Since its IPO, Waystar’s stock has maintained a steady upward trajectory, reflecting investor confidence in its growth strategy.

Technically speaking, this chart is a thing of beauty. However, at the moment it is too extended to really offer an entry. The ideal buy point would have been the breakout on 12/10 after the earnings consolidation. However, if you like the story and company, this should be on your pullback buy watchlist.

Other High Volume Gaps

Rumble Inc - A neutral video and cloud company.

Rumble: Tether making strategic equity investment, allows insiders/all shareholders to tender, while adding $250m growth capital -- Oppenheimer (7.19)

Analyst Jason Helfstein commented, "Friday post-close, RUM announced $775M equity investment from stablecoin operator Tether, with $250M in newly issued shares at $7.50 for growth capital. Furthermore, tender provides insiders an effective diversification without affecting share price. In our view, RUM selling primary shares at attractive valuation to further bolster balance sheet, without a meaningful change in strategy, should alleviate investor concerns related to liquidity before reaching positive FCF. In conjunction with RUM's previously announced plan to purchase <$20M of Bitcoin, this should bolster interest around crypto content/ads. While Tether may collaborate with RUM on 3P cloud offering in the future, nothing was announced as part of this investment. Maintaining Perform on valuation (27x FY25E sales vs. PINS/SNAP's 4x) ahead of more robust advertising/ subscription sales."

Interesting fast growing company appearing to gain access to crypto markets. Stock surged higher into 52 week high on super heavy volume. Would want to see how this settles down and can offer potential low risk entry.

Conl:

All in all, pretty slow week to be expected.

Happy holidays to you all!

—NS