RE:New Valuation based on today's newsA different tune from last night, but well said and respect. Thanks for taking the time to write this up. I've always had a multiplier around 30 x for pyr...for now, that could lower as years go on. Have a great evening
BCdude wrote: Congrats to all the longs for the great quarterly news today. I know a lot of you disliked my comments yesterday, but you can only go on what you have in front of you, and unlike many on this board I am always willing to consider other intelligent viewpoints without my blood pressure rising. I'm also willing to change my mind when presented with compelling evidence contrary to a current view, and with the recent Q3 news there is more reason for optimism than I had last night.
While there are still plenty of unknowns, I think if Peter and Co. can prove out those kinds of profts and margins on a regular basis there is a good case for PYR being at least fairly valued at current levels. Profitability changes everything, as they say.
The next question, for me, is what will profits look like on a quarter-by-quarter basis? In my calculations yesterday I had assumed $20 million of annual revenue in addition to whatever torch revenue is closed in 2021. Since it was "back-of-the-envelope," I didn't have good line of sight on profitability -- whether costs would go up in tandem with revenues, etc.
Today's news makes me more confident that profit margins will be healthier than expected.
So how would I value PYR after today's news? It all depends on profits going forward, and now that PYR is ramping up into unknown territory it remains to be seen.
I think it's worth calculating different scenarios based on anywhere from $0.15 to $0.35 for 2021. I would probably place a 15x multiplier on these profits, since PYR is still fairly unknown, even though more senior tech companies often trade at higher multiples. For reference, APPLE has had a P/E ratio as high as 38 (set this year), but over the last decade or so it's median P/E ratio has been around 15. So be careful what multiples you attach to P/Es, especially since we only have one quarter of data to go on. My two cents.
SCENARIOS
$0.15 profit at 15x = $2.25
$0.25 profit at 15x = $3.75
$0.35 profit at 15x = $5.25
Of course, it is every investors perogative to attach whatever multiples they see fit to a stock, and it is quite possible that if PYR gets a very large torch order (or one of its other business units outperforms) that we could see much higher revenues and profits. And in that case, I would revise my estimates higher again.
There is also the quite sensible position that PYR, with this excellent news, will once again turn into a momentum stock that will go higher despite whatever valuation is placed on it. I wouldn't be surprised to see it shoot back up to $5.00+ on this news, and it's also possible we won't see the $3.00 level again.
Wishing success to everyone, including those who hurled hate in my direction yesterday. No hard feelings. And best of luck to Peter and PYR. I hope all of you hit a home run.