simpliciti wrote: Assumptions:
- 15000 units sold over the next 12 months (50% less than the recent company projections) equals sales of just under $98 million
- Gross Margin of $58.5 million
- Operating Expenses of $34 million 60% of total gross margin, (nearly 30% of revenue)
- Net margin of $24 million
- Multiple of 20 X Earnings
- Enterprise value of $480 million
- 240 million shares outstanding
- $2.00 per share
This calculation is made now...... not after they've made the sales. Once anything close to those sales are being made the multiple and the projected earnings increases.
At present the market is telling us that they believe there is a 40% chance that the company will achieve 50% of their forecast. That is one helluva discount wouldn't you agree.
So the bet isn't about whether
- the product works as or near as advertised (people are buying it)
- the product has received 3rd party validation
- there really is a manufacturing facility
- or any of the other nonsense that bashers continue to post on this board.....
Its really all about whether the team currently assembled has the collective capability to deliver now that the lions share of product issues have been overcome.
So far the odds makers (the market) is suggesting that this group has a 40% chance of success. I say this because the current price represents a 60% discount from otherwise fairly conservative estimates.
Why is this?
History has some role to play here. The bashers play that card daily. The team is not entirely new. Some have been around for an awfully long time and participated in even what our present CEO would describe as very unorthodox management of any company let alone one that is publicly traded.
To overcome the last vestiges of this "hangover" management needs to come up with the resources and strategies that will commit to deliveriny full and timely disclosure of any and all information that supports the markets attempts to rationalize/validate their investment strategy with respect to DYA. I don't believe the company is there yet. They don't and shouldn't present information that could reduce their competitive advantage or devalue their IP
That being said there is no way that this company is not in 100X better condition than any time in the past that I can recall. I can say that with certainty because I've been around.....that long.....
Absent a major stumble.....in the coming weeks and months the company will get closer to its revenue objectives and even closer to mine. As this happens the current discount to projections will evaporate and the increase in revenues will give rise to new projections and in my opinion higher multiples.
The end game here is not what this team will accomplish long term, but rather what this team can convince much larger entities what there opportunity will be.
Good luck.... stay patient (if you can afford to)