Thruvision Shares Plunge After Strategic Review, Warning on Cash

Thruvision Group plc (LON:THRU), the leading international provider of walk-through security technology, has seen its shares plunge in recent months following a strategic review and a warning on cash burn. The company's share price has dropped by 32% in the last month and by 50% over the past year, raising concerns among investors about its financial stability and growth prospects.

The strategic review conducted by Thruvision Group has led to a significant change in its revenue mix, with approximately 85% of H1 2025 revenue coming from Retail Distribution sales, which doubled compared to the same period last year. This diversification has led to a broader customer base, which should help smooth out revenue volatility in the future. However, the overall reduction in revenues is disappointing, as the company's revenue has declined by 37% in the last year. This decline in revenue is a significant factor contributing to the share price drop.

Thruvision Group's cash burn rate is a significant concern for its financial stability. The company has a cash runway of 2.8 years as of March 2024, which means that at the current cash burn rate, the company would run out of cash in approximately 2.8 years. This is a relatively short period, considering that analysts expect the company to reach cash flow breakeven in 3 years. The company needs to address this issue by reducing its cash burn rate, improving its revenue growth, and potentially raising additional capital.

The company has managed to reduce its cash burn by 45% over the last year, but this reduction has not been enough to significantly extend the cash runway. The company needs to continue to reduce its cash burn rate to improve its financial stability. The company's revenue decline is a significant contributor to its cash burn, and the company needs to address this decline in revenue to improve its financial stability.

Thruvision Group's high price-to-sales ratio (P/S) of 2.4x, compared to the industry average of 1.3x, may have also contributed to the share price drop. This high valuation may have led investors to question the company's growth prospects and sell their shares. The company's slow revenue growth and the absence of any material Customs orders in the first half of the year have also raised concerns about the company's ability to maintain consistent growth.

In conclusion, Thruvision Group's share price drop can be attributed to several specific factors, including its revenue decline, high P/S ratio, slow revenue growth, and cash burn concerns. The company's strategic review has led to a more diversified revenue mix and growth in its sales pipeline, but it needs to address its cash burn rate and improve its revenue growth to maintain its financial stability. Investors should closely monitor the company's progress and consider the risks and opportunities before making any investment decisions.