OGI Numbers: Food For ThoughtOGI has won some of the top awards at various competitions, which is a great indicator of future demand. All companies will do well on day 1, but it's the recurring purchases in the future that will separate the pack.
Best bud, lowest growing cost per gram, organic options, lowest valuation, etc.
All the stars are aligned, and the market will eventually notice. It will be a slow and steady battle but that's much healthier than massive price spikes. Or, OGI will get taken out because it's really not that hard for other companies to recognize all of this.
MATH
If you do some basic table napkin math.....
Current production = 34,000kg annualized. @ $6 selling price that's $51 million a quarter in revenue.
A. They are ramping up production and will be at 116,000kg by 2019 YE.
B. For now, $6 selling price is conservative. Long-term that will be realistic so no point overstating.
At full capacity, we arrive at $174 million a quarter in revenue. That would infer OGI is currently trading at 1X FY 2020 sales.
As mentioned, OGI has industry leading costs, not just for growing but overhead costs are extremely low. I do not think it's unreasonable to have overall costs for them as $2 a gram since growing costs are below $1. I think this could even be conservative once they're producing at full scale.
Here's a breakdown of projected bottom line earnings based the numbers I've given, and the various scenarios based on average selling price.
@ $6 = $464 MM FY 2020
@ $5 = $348 MM FY 2020
@ $4 = $232 MM FY 2020
In the worst case scenario ($4), OGI is currently trading at a 3X FY 2020 P/E ratio. In case you don't understand this, it means they could theoretically issue a $1.80 dividend if they wanted to payout everything.
Load up.