RE:PHA mid-to-long term potential
colourama wrote:
While we wait to see if everyone sells off the stock to below the price when the acquisition was announced, would anyone have a speculation on what we could be looking at for the mid-to-long term potential of PHA?
If I understand, their vision is a coast-to-coast operation covering all the major markets, with a significant presence in the northern and remote communities. Is there an estimate to the addressable market for PHA? We are approaching $100 million in revenue currently. I could guess that as they progress their expansion into Ontario, that could bring us up to $150 million to $200 million. Then there is BC and further northern communities possiblilties.
They have about a 25% market share in the province of Quebec with a population of 8.6 million people. Given the revenue produced in fiscal 21 this translates to a total market of at least $266.4 million for Quebec. Canada is about 4.4 times the population of Quebec which tells me the total addressable market could be at least $1.172 b in Canada alone. There are other verticals the company may pursue that is not even included in this figure. Ontario has a population of almost 15 million so there's plenty of upside there too.
Imagine they can capture a 25% market share of Canada. This gives a potential revenue figure of $293 m.
Management believes they can achieve ebitda margins higher than 10% and possibly as high as 15%. In any case, I think the potential is there for the company to be a 10-bagger just by capturing the Canadian market. If the company can re-rate by a factor of 2 and grow their revenue and ebitda numbers by a factor of 5, then we have a 10 bagger on our hands.