RE:RE:RE:RE:RHT HIRES LYTHAM PARTNERS AS INVESTOR RELATIONS PROG.exactly, the table is showing possible scenarios of gross margin because bloody mgmt has gone silent on this after bragging for years it was going to be 85+%. That no. is no longer realistic since they are now a hybrid business of software services and care management services which is labour intensive.
aaaaaargh wrote: I fully understand how you came to your conclusion of #2, however I don't think he was showing how things would change with growth, rather was giving different possible scenarios...
theinvestor22 wrote: 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 |