RE:RE:Upcoming subscription model and AirbnbI was excited to hear UI finally issue guidance in the presentation given to SmallCap Discoveries. Their estimates ($6M in FY '21) lined up nicely with my internal projections ($6.1M). At that level of revenues the company should be doing somewhere around $4.3M of gross profit and, based on my conversation with management, G&A / opex should hold steady but I've inflated it a bit to $2.5M from $2.1M on a TTM basis.
Based on the above the company should do somewhere in the neighborhood of $1.8M (let's use a range of $1.5M - $2.0M) of operating income. Assuming a 15-20x multiple, for a company growing revenues 30%+ and earnings ~100% that seems reasonable, we'd be looking at an enterprise valuation range of $22.5M - $40.0M.
Backing out ~$3M of pro forma debt would yield an equity value of $19.5 - $37M compared to a current value of ~$9.5M (100% - 400% upside). This doesn't factor in warrants/options/conversion of remaining debentures but given the value gap those are a non-factor.
If we roll this forward another year and indeed hit a $10M revenue number, most of that will drop to the bottom line and you're talking about $4M+ in operating income and a value in the range of $65M to $88M or truly 10-bagger potential.
Looking forward to watching this company continue to execute on the massive opportunity in front of it and hopefully realizing their true potential. As noted above its a very lucrative proposition.