AOTI Inc (AIM:AOTI) delivered a full-year trading update that was broadly in line with expectations, but the more significant news was a strategic decision that removes the single biggest cloud over the company's investment case.
Revenue grew 14% to $66.5 million, against consensus of $66.1 million, according to Panmure Liberum.
Net debt came in at $6.5 million, well below Peel Hunt's estimate of $10.2 million and consensus of around $12 million, because cash receipts outside Arizona improved sharply in the second half.
The Arizona situation has been the issue for AOTI since mid-2025, when rising insurer denials for Medicaid patients began pushing receivables higher.
Those receivables reached $15.6 million by year-end, up from $8.2 million in 2024. The company recovered $1.1 million through arbitration, but management concluded the process is too slow to sustain.
From April, AOTI will stop accepting new Medicaid patients in Arizona unless a resolution is reached with the state.
Peel Hunt has stress-tested the bear case: if Arizona trading ceases entirely, the 2026 revenue hit is around $9 million with an EBITDA impact of $4 million to $4.5 million, shifting its 2026 estimates from $80.6 million revenue and $11.1 million adjusted EBITDA to roughly $71.6 million and $7 million.
Even in that scenario, Peel calculates the stock trades at around 8.5 times EV/EBITDA. Panmure Liberum makes a similar point more bluntly: AOTI trades at less than half peer group multiples despite growing at double the peer group rate.
Both brokers maintain 'buy' ratings. Peel's has a 108p target; Panmure Liberum 74p. The shares trade at 35p.
Both also flag a potentially transformative near-term catalyst: a nationwide CMS coverage determination for the TWO2 device, which management says is expected shortly.