Should You Buy RAAC SPAC Stock Before Merging With Berkshire Gray?

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Berkshire Gray expects sales of $ 59 million in 2021 and forecasts growth to $ 119 million in 2022 and $ 927 million in 2025. The company also anticipates that Adjusted EBITDA and Free Cash flow will be positive in 2024, and expects gross margin increased from 7 percent in 2021 to 48 percent in 2025.

RAAC valued Berkshire Gray at a pro forma implied equity value of $ 2.74 billion. At RAAC’s current share price, Berkshire Gray is valued at approximately $ 2.82 billion. Adjusted for the pro forma net cash of $ 507 million, the company would have a pro forma enterprise value of $ 2.31 billion. Based on this company value and the forecast sales of Berkshire Gray, the valuation multiples are 39.2x (2021 sales), 19.4x (2022 sales) and 9.3x (2023 sales), respectively. The company’s 2.5 times EV-to-sales multiple by 2025 looks a lot more attractive.

RAAC stock looks like a good buy based on Berkshire Gray’s valuation and robust growth prospects. Berkshire Gray customers include Walmart, Target and FedEx. Additionally, the company estimates that only 5 percent of warehouses are currently automated, underscoring the huge business demand for warehouse automation service providers. Berkshire Gray estimates the total addressable market to be worth around $ 280 billion.

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