RE:RE:RHT HIRES LYTHAM PARTNERS AS INVESTOR RELATIONS PROG.I've found that many early stage SAAS companies tend to get valued based on a p/rev model, however, if you wish to go down the road you're travelling (which isn't necessarily a bad idea), then a few points are in order:
1. I don't see any forex adjustment. Are you assuming CAD $50/patient/month?
2. You've clearly fudged the gross margin % to come up with the same bottom line in all 3 cases. I can't recall any small business offhand that keeps reducing its gross margin with increased sales. If you go the other way, with maybe a 75% GM at the top sales level, you'll get a bottom line (fair value) of $1.27. 3. Tax rate is 26.5% in Canada. I usually use 27% because there are sometimes a few non-deductible items.
4. I think you should assume a greater number of shares outstanding as the rev increases.
These last 2 items won't change the fv much, but you might as well be a little more precise.
lscfa wrote: Reaching cash flow positive (whatever that means) is not enough to justify current share price.....
| Patients | 52,000 | 42,000 | 35,000 |
| Rev @ $50 / mo | 7,800,000 | 6,300,000 | 5,250,000 |
| Gross margin | 40% | 50% | 60% |
| Gross profit | 3,120,000 | 3,150,000 | 3,150,000 |
| Cash expenses | 1,800,000 | 1,800,000 | 1,800,000 |
| Operating income | 1,320,000 | 1,350,000 | 1,350,000 |
| 30% tax | 396,000 | 405,000 | 405,000 |
| Net income | 924,000 | 945,000 | 945,000 |
| Shs o/s | 178,358,475 | 178,358,475 | 178,358,475 |
| eps | $0.005 | $0.005 | $0.005 |
| Annualized eps | $0.021 | $0.021 | $0.021 |
| Multiple | 20 | 20 | 20 |
| Sh value | $0.41 | $0.42 | $0.42 |