$0.19
$1.25
bear $0.19
base $0.86
bull $1.25
margin of safety $0.15
market price* $1.29
Business condition attached to the margin of safety
Signed, recurring robot-lease (RaaS) contracts whose revenue and gross profit cover the company's cash operating costs, or a sustained cut in spending to well below the current burn rate.
Richtech Robotics sells and leases service robots to restaurants, hotels and retailers: the Matradee server robot, the ADAM and Scorpion beverage robots, and cleaning and delivery machines, plus a small restaurant-management business and a new humanoid robot (Dex) announced in October 2025. It has shifted from one-time robot sales toward leasing robots for a recurring fee. Revenue is tiny: $5.0 million in fiscal 2025 (year ended September 30) and $3.9 million in the first nine months of fiscal 2026, up about 10%. Gross profit was only $1.5 million over those nine months. The business does not earn money today. Measured the way we measure every company (operating cash flow, less working-capital swings, less stock compensation, less the part of equipment spending needed just to stand still), it consumed about $18 million in fiscal 2025 and about $8 million in fiscal 2024. Over the first nine months of fiscal 2026 the equivalent figure was roughly $10 million before counting equipment spending, and about $40 million after $21.7 million of equipment purchases (largely robots for the leasing fleet) and $9.0 million of stock compensation, with a $9.5 million write-down of long-lived assets in the June 2026 quarter. Note that this measure strips out roughly $9.8 million of interest the company earned on its cash in those nine months, because we count the cash itself separately below; without that interest, the operating burn is much larger than the reported cash-flow figures suggest. What the shares are worth therefore comes almost entirely from cash, not from operations. At June 30, 2026 the company held about $302 million of cash and $38 million of short-term investments, against total liabilities of only about $4 million and no borrowings. That cash was raised from investors: about $220 million in fiscal 2025 and a further $110 million in the first nine months of fiscal 2026, which lifted the share count from about 122 million to about 224 million. We use 224 million shares; further issuance would dilute this. We give the operating business no positive value. There is no signed contract, backlog or multi-year record showing that revenue of about $5 million can cover operating costs several times larger, and hoped-for adoption of humanoid robots, more leased-robot placements or the Walmart pilot (only two of a planned 20 locations are operating) are not evidence we can credit. Each case is therefore the cash on hand less the present value (at 6%) of the cash the business keeps consuming before it stops or is wound down, with nothing assumed afterwards. Bear case, about $0.19 per share: spending continues at the recent pace of roughly $53 million a year for seven years, as management has done with every prior raise. The business is worth about negative $296 million (it consumes cash), it owes nothing, and about $340 million of cash leaves roughly $44 million for shareholders. The recent $9.5 million asset write-down shows the risk that leased-robot investments do not earn their cost. Base case, about $0.86 per share: spending settles at about $35 million a year and runs for five years before the business is either shut, sold for little, or has to live within its means. The business is worth about negative $147 million, debt is zero, leaving about $192 million. Bull case, about $1.25 per share: the company trims its burn to about $22 million a year (roughly what the operating losses excluding one-time items and stock awards, plus normal equipment spending, run at today) for three years. The business is worth about negative $59 million, debt is zero, leaving about $281 million. All three cases are less than the cash-per-share of about $1.51 because the business is expected to keep spending. Value shrinks each year the burn continues, so the margin-of-safety price sits below even the bear case. The analysis would be wrong to the upside if leased robots start producing contracted recurring revenue well above costs, which the filings do not yet show, and wrong to the downside if the company keeps issuing shares or writes off more of its equipment. Accounting notes: the fiscal 2024 and 2025 results were restated in an amended annual report filed in August 2026; the restatement mainly concerns non-cash gains and losses on warrants (a $34 million non-cash loss in fiscal 2025), which do not affect the cash-based measure we use. The amended report was not available in full text, so we relied on its reported figures. Some smaller non-cash items in fiscal 2024 (about $0.9 million) could not be fully reconciled but do not change the conclusion. Component sourcing from China exposes the company to tariffs and supply disruption, and contract manufacturers supply key parts from single sources.