John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

VirtualScopics: Undervalued, Unconventional And Misunderstood Oncology Play With Significant Medium-Term Growth Potential

Company overview

VirtualScopics (NASDAQ:VSCP) provides imaging solutions used in drug and medical device development.

Market incorrectly assumes transition year will become a recurring event

The distressed relative valuation may appeared deserved due to the following recent headwinds.

Lack of revenue growth and profitability. The current revenue run rate is near a five year low (and projected to be unchanged for 2014) due to the slowdown in bookings in prior years that has since carried over into more recent results as well as the timing of the startup of new projects and revenue recognition. This lower top line has flowed through to the bottom line as shown in the chart below.

C-suite turnover. In the fall...

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