US Stem Cell Inc (OTCMKTS:USRM) Is Undervalued At Current Prices

Regular readers will know that US Stem Cell Inc (OTCMKTS:USRM) is one of the companies we keep coming back to here at Insider Financial. It's a biotech play that, as outlined in previous coverage, we feel is undervalued at current prices and we think that a longer term revaluation that closes the gap on the divergence between intrinsic value and price is a nice opportunity for anyone looking to turn a medium term profit or to pick up an exposure to the stem cell industry in the US.The last time we covered US Stem Cell, the company was trading for around $0.05 a share. At the time, we urged our readers to take a look at the science that underpins US Stem Cell's core technology and to form a bias based on the potential of the technology as opposed to the company's operational history. This sort of fundamental suspension isn’t something we often recommend, but when every so often in the biotechnology space we see a scientific approach that we like enough to justify taking a science first approach. It's a risky one, sure, but it's paid off before and we think that US Stem Cell could be next in line.During the two months subsequent to our previous coverage, the company has actually dipped a little. At the most recent close (Monday night), US Stem Cell went for $0.034 a share. That's a circa 30% discount to the rate at which we took a look at it back at the end of June. Our thesis still stands – this is a solid scientific company that's poised for long term growth; the only difference now is that it's available cheaper than it was a few weeks back.And it's not all about the science. This decline has come against a backdrop of some pretty solid fundamental developments. Back on August 9, US Stem Cell reported results from operations for the quarter ending June 30, 2017. The numbers, as reported at release, represented the most successful quarter in the company's history.Revenue for the period came in at $1.38 million, up 104% from the $678K recorded during the same period in 2016. Margin increased from 65% to 71%. Gross profit increased from $442K in 2016 (second quarter) to $985K in 2017.And here's the key figure – net income hit $100K for the six months' year to date, up from a net loss of $272K during the same six-month period in 2016. That's a pretty big turning point for a company at this end of the biotechnology space and it's one that seems to have been largely overlooked by markets.So we've got record financials, a net income and a scientific platform that could potentially be a game changer if US Stem Cell can execute on its commercialization strategy for the asset.What's next?Well, longer term, we're expecting this one to revalue considerably. As long as it seems to have been around, the stem cell space is very much in its infancy (especially in the US) and US Stem Cell has positioned itself to draw benefit from industry growth as and when it comes. Nearer term, we're looking to the results of the company's ongoing clinical program as a catalyst to get this revaluation underway.Bottom line here is that we've got a company that's valued at less than $11 million (at current prices) and is doing more than $1.3 million in quarterly sales. Cash is admittedly weak, reported at $929K at last count (June 30, 2017) but with cash flow now not an issue, there's no immediate dilution concern in place to weigh on share price.Check out our previous coverage of this one here.We will be updating our subscribers as soon as we know more. For the latest updates on USRM, sign up below!Image courtesy of Joseph Elsbernd via FlickrDisclosure: We have no position in USRM and have not been compensated for this article.