RE:RE:Pyrogenesis "CLIENT A" Acquisition to SP ProjectionCome on, show me a company that passed from 4M in annual sales/backlog to 40M to 1.3B in about a year and that only had a 2x P/E.
BCdude wrote: Thanks Aarman for taking the time to put this together. Just curious where you're getting your price target from? Typically small cap companies, if they are EBITDA positive (which PYR is not) would be valued in the 2-4x revenue range. Larger cap stocks (those over $1 billion) are generally valued on earnings. Sexy technology/ESG sector players can sometimes command hefty premiums, but my rule of thumb is 15x forward earnings. PYR doesn't have the track record there yet, so my guess is that if they land the contract with Client A a valuation of 2x revenue would be typical to start, until they've proved they can deliver such a large contract on time and on budget. Higher multiples are generally reserved for companies that have high visibility on margins and EBITDA profitability. So my take would be a market cap no higher than $2.6 billion. That would put the top-end share price at around $18 maximum ... for now ... still a very nice reward from current levels. And there's blue sky potential if they sign other business.
Just wanted to put my two cents in with this very simplified valuation exercise. GLTA.