Post by
Hiddensecrets on Mar 20, 2021 11:43pm
Per Sales forecast: Share price $ 1.50 ramping to $ 19.50
I apologize if some of my calculations are not accurate, I am trying my best with the information that is available.
The company has stated that in 2021 they will be cashflow positive. I verified their financial statements and the burn rate is $ 450,000 per quarter or, $ 1,800,000 per year. This company is a software company so the costs will remain in this range for years to come, which means higher sales go straight to the bottom line.
The company has set two goals:
(a) For year 2021 selling a total of 2,080 Mesh connectors
(b) For year 2022 selling a total of 13,500 Mesh connectors
Target market is 185,000 mesh connectors around the world.
The revenue will be RECURRING so it is a lucrative business model where you can build on it with other services as add ons.
Simple Math:
Total burn rate in 2021 of $ 1,800,000 DIVIDE BY 2,080 mesh connectors = $ 865 per mesh connector/year
We know two things: 2,080 comes from management and, at that rate they are cash flow positive.
So this means that each mesh connector brings in $ 72 per month or $ 865 per year.
In 2022, the company expects to sell 13,500 Mesh connectors.
This will bring in RECURRING REVENUE of $ 11,677,500 per year. If we remove cost of $ 1,800,000 which will be fixed, we arrive at a profit of $ 9,877,500 for the year.
With say 200 million shares, that amounts to 5 cents per share in earnings in 2022.
Software companies that have recurring income easily trade at multiples of 30 times earnings.
So this gives a stock price of $ 1.50/share (30 times * .05 cents per share earnings).
How big is this market?
It is 185,000 retailers * $ 865 per mesh connector giving Revenue of $ 160,025,000. Lets assume costs are higher by then at say $ 30 million per year and we have a profit of $ 130,025,000.
Divide that number $ 130,025,000 / 200 million shares = .65 cents per share earnings.
Take .65 cents per share eanings and times it by 30 times and you get a stock price of: $ 19.50 per share.
That is, if the company does not else.
Good Luck,
MPO
Comment by
summitking on Mar 21, 2021 2:31am
Some easier math is they are to be cash flow positive at roughly 350 connections per year at US$250/connection. Then look at their 2021 and 2022 targets to understand their cash flow projections. The biggest questions is the multiple applied. In any case, looking super solid.
Comment by
Midtown007 on Mar 21, 2021 9:41am
Just as an FYI They receive $250.00/month per mesh connector and there are around 850,000 retaiilers