LGC Conservative forecast $6.99 a share LGC Fundamentals behind the LGC
All numbers used in this forecast will be gathered from www.lgc-capital.com and using the corporate presentation.
LGC expects their first cycle to be 7,000 kg of marijuana with a cost of production of $1.1 per gram and a selling price of $5 per gram (low end price in the market)
7,000kg equals 7,000,000 grams
Cost of goods produced is 7,000,000*1.1 = $7,700,000
Revenue= 7,000,000*5 = $35,000,000
Profit of $35,000,000 minus the cost of management
So lets say $30,000,000 profit after all other costs of operating the business
This is just in the first cycle of growing!
The time to grow the Marijuana will take between 6 weeks for the veg cycle and 8.5
Weeks for the budding cycle. So 14.5 weeks or about 3.5 months
Now we do Cycle 2 will take 8.5 weeks until the budding is completed as the new plants have had time to Veg before the next cycle.
19,000KG = 19,000,000 grams
Cost of goods produced is 19,000,000*1.1= $20,900,000
Revenue= 20,900,000*5= $104,500,000
Profit of $104,500,000 minus the cost of management
So lets say $100,000,000 profit after all other costs of operating the business
Now these cycles come every 8.5 weeks so max turnaround is 2.5 months therefore you can achieve about 5 cycles per year
With the first cycle being profit of $30,000,000 then the second cycle bringing in $100,000,000 profit, then most likely get two more growth cycles of $100,000,000 each. Once the first growing cycle begins the year will achieve a profit of $430,000,000 with years followed with on average of $500,000,000 in profits for the whole company!
Now LGC owns 60% of the company so we take the $500,000,000 *.6 = $300,000,000profit per year!
If you take a conservative estimate of trading at 8x earnings you have a market cap of $2,400,000,000/ 343,003,989 (fully diluted amount of shares outstanding) gives us a conservative share price of $6.99 per share!
https://www.lgc-capital.com/
kind regards,
Bulltrader