CAI · investment memo
Base-case FY2031E operating margin (memo scenario table; Bear 6.0%, Bull 24.0%). Constraint m_EBIT,T 16.5 <= m_gross,T 65.0 SATISFIED with 48.5pp of headroom. GROSS-MARGIN NOTE, FLAGGED NOT FIXED - this project has carried CAI's gross margin as an open question: three figures coexist in the memo and they do NOT contradict each other, they measure different things. 66.4% is FY2025 as reported (reproduced independently from the 8-K: gross profit $539,168k). 64.9% is FY2025 stripped of the $33.6m prior-period true-up. 65.0% is Q1-2026 as reported. The two independent constructions agree to 10bp from opposite directions, and ~65% is the run-rate. The constraint is satisfied on all three, so nothing here is load-bearing on the verdict; the ambiguity is recorded rather than resolved. ABOVE the FY2025 trailing operating margin (~1%), so the below-trailing error class does not apply.
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $12.88 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Not stated. This name has no falsifiable invalidation conditions on file, so it cannot be risk-monitored. That is a gap in the research, not a clean bill of health — recorded rather than hidden.
Not stated. No permanent-loss case with a named cause is on file. A valuation bear case is not an impairment case.