RE:My TakeI agree with this, it's a reasonable way to value the company. It's hard to say what percent of manufacturing capacity they can generate sales for, might only be 10% out of the gate, but it seems amazing that even with the most conservative estimates, we end up with a price that's many multiple times higher than where it was trading today. I think there is a lot of optionally built into the potential forward sales multiple this stock could trade at. Given the low float, and the tangible benefit of the product, I think it could trade at high multiples to the backlog as word spreads and new investors get excited about this story, I think many would be willing to pay up to own a piece of BioCloud. The CEO often mentions $50m revenue as a goal to be attractive as a takeover candidate . Seems obvious that was managments goal when starting the company, and I'm curious now whether their goal has changed or if they've set their hurdle higher. How much do you think this company is worth to a Honeywell or Johnson Controls?
BCdude wrote: Hi all,
Congrats to everyone. Truly exciting to see this technology verified, and the journey toward commercialization begin. I wouldn't be surprised to see the share price hit $10+ tomorrow, as that is only $300 million market cap -- which is basically what they suggest is the potential revenue per month based on manufacturing capacity.
Not surprisingly, they will need CSA approval, which they say could be 30-45 days. We should also factor in some delays. So my guess is that initial orders won't be seen until at least November.
However, I'm fine with this. The company needs time to fine-tune the technology (lower detection limits), market the product, and ensure manufacuring specs are top notch. These things all take time, and I for one am happy to be patient.
What's the potential here? The 20k manufacturing capacity is merely that: capacity. It gives us an idea of what's possible, but we shouldn't assume it's guaranteed. Even half that amount would be 120,000 units per year, which is ~$1.44 billion revenue run rate. Add on current smart building revenue, Toyota, and OEM, and we're probably approaching $1.5 billion.
Conservatively speaking I'm okay with giving KNR a 1.5x multiple, which is $2.25 billion market cap potential. Since the primary targets right now are Canadian governments, I would expect that in CDN dollars, not USD as some have suggested.
In any event, that still implies a price of almost $60/share on a fully diluted basis, based on a revenue run rate utilizing half the capacity.
Will it get there? I don't know. But if it does, I think it will happen over a period of 6-12 months.
A few follow up questions:
1. Will the company have to raise capital to move this forward? The good news is that with a much higher share price, capital will be a LOT cheaper. Far less dilution.
2. Can the company handle the increased business volume and juggling the numerous businesses, and how will that impact buy-out plans?
3. What's the roll-out plan beyond Canada and the timeline they anticipate?
Happy days! GLTA