In a nutshell a 50% haircut on the valuation: VALUATION:
Our $5.50/share price target is "based on an ~5.5x 2022E EV/sales, a discount to cleantech and
industrial gas peers (see Exhibit 1) at an average of ~11.0x"
I wasn't suggesting a comparison to Plug or Ballard directly. Perhaps I didn't make my point well.
Read the quote above carefully.
Now my point, and I quote myself:
Why should Xebec be any more penalized by their peers anyway? Their peers have disappointed as much if not more! FuelCell numbers were a disaster, Plug had negative revenues, and Ballard's annual revenues were down double digits. Xebec's were up 17%
While I admit mentioning those 3 specifically, my disdain lies in Raymond James suggesting Xebec should trade at a 50% discount to "cleantech and their industrial gas peers" to use their exact words. In other words, a discount to the industry.
This is a nonsensical argument, particularly when their peers are years from profitability, struggling to even grow revenues, and are coming to market regularly for financings in the billions.
Xebec isn't.
The market is human psychology under a microscope.
Everybody thinks there's something wrong, and maybe something they don't
know. Ciao was absolutely right. Selling begets selling.
That's exactly what we're seeing.
Xebec is in the doghouse right now, along with many other stocks.
The market hasn't exactly been good.
No amount of watching and wishing will turn this stock higher.
It will turn higher on its own, whether it takes its time or not, and no matter how frustrated you get in the meantime.