RE:RE:Valuation scenario.You bring up a great point, and in geneal I would tend to agree with you. Once KNR starts running a profit, I think we'll see analysts rate it using P/E multiples. Probably in the 15x to 20x range. To be conservative, I'd also prefer a 2x to 3x sales multiple, if we'e using that valuation metric.
No question the risk-reward is weighing heavily on the reward side.
pointer wrote: canyousayiii wrote: Trying to figure out the risk/reward today. They are gearing up for production capacity of 20k units per month. Let's assume there is a reason for that!!! Let's work backwards. Assume they sell 3,000 units per month. Assume revenues to KNR of $7,000 after a generous distributor cut and let's assume KNR sells nothing directly (very unlikely but conservative). That is $21 million monthly or $252 million annually. Slap on a 4 times sales multiple and that is about a billion market cap divvied by 40 million shares. $25 SP. Using the above assumption of 3,000 unit sales monthly, not including current core business which may benefit from BioCloud visibility, not counting recurring cartridge revenues. What am I missing? Too high of a sales multiple? Half it. $12 SP. So $4 for every 1,000 units sold. At these ratios, sell 4,000 units, and that is $16 SP. 5,000 = $20 SP. 10,000 = $40 SP. Go back to 4 times sales ratio, double these. What am I missing? A buyout offer once they they start delivering sales and one that will not give us the above premiums if the current SP doesn't move? I don't think I can come up with better numbers on any of my other plays, but before I put much more into this basket, what am I missing?
Personally, I never liked the method of using sales multiples to determine the value of a stock. There are too many variables involved, as costs of goods sold can vary a lot from company to company. That is why I tend to use things like PE multiples that even the playing field. Profit is profit, no matter how you get there.
But I don't think it matters what valuation method one uses on KNR, it is extremelydifficult to come up with a scenario that justifies a $5 share price. Everything I have seen results in multiples, often many multiples, of today's share price.
And it looks like our story is only beginning to hit the internet, so we might need a 5-point harness to keep us in our seats in the coming weeks.:o)