SP targets - Different modelingOk. If we remember a while back, I would usually post SP targets after quarterly results. Typically my targets were a little less than the pros, as this company was always a little light on EPS relative to revenue, but still very reasonable.
That was back when the company was turning a profit. Since the change in business model, that isn’t working. So I had a look using “cash flow” instead of earnings as some here have suggested.
My fiscal 2022 fair value price comes in at $24.75. That is not too far below the pros. That is allowing for the multiple contraction in tech stocks as well.
With that being said my fair value price with the usual EPS included in the model is $10.60.
Given the current market conditions it would be reasonable to expect the SP to be trading about 25% below these levels. So if investors were using the cash flow model, shouldn’t the SP be quite a bit higher right now? Or are market conditions dictating more like a 50% discount to fair value price?
On the flip side, if all investors were looking at things like I do, we would be sitting at 8 bucks, or even less, so that’s not accurate either.
Guess we are somewhere in between. Interesting to see how nice we recover once we get this inflation and energy crisis behind us.
GLTA