RE:DM Hi @Investor10X:
Thank you for your posts and your time, as you're one of the very few now, who keep the quality of DM BB above the Stockhouse average, as most of the DM BB veterans aren't active anymore or just take a break of posting.
I really appreciate your detailed and well founded posts - especially when they ask god for help, it seems like we're at the end of discussions on DM BB - so thank you @InvestorX10 for your high quality contributions!!
Have a great time.
Best
Torlif
Investor10X wrote: I been away for a bit and just catching up on some of the posts. I see we've attracted a few more bashers to the board. I suspect this means the institutions are working hard to get those cheaper shares while the market corrects.
It's funny to read a few posts of people criticizing $30 million dollars in revenue in just the first half of the year. Either the criticism is it's not enough or it's covid revenue. lol There was one post I read where the poster literally criticized $50 million in revenues by one production company as being a "slow down". WOW! I wonder what companies this guy invests in because I don't know too many micro/small cap companies that pulls in $50 million in revenues from just one of the production companies that they have contracts with.
Anyways moving on, a few posters wanted me to justify my numbers for DM. Before I start it always comes down to what the institutions do, as they are the ones to move the stock.
My view of DM is that it is a multidimensional company (AI and Health) and this is at odds with some people on the board who seem to think this company is all about the AI only. Again, this idea of discounting the covid revenues is riduculous, as it's part of their health division. Revenue is revenue. No one would dispute that DM will have some years in which the company will have large AI contracts and other years where they will have smaller AI contracts. It's all revenue! The fact that their health division is galloping right out of the gates leading with large contracts is not a bad thing. At some point, Medi-Call and Concierge will probably continue on in revenues where the covid testing has left off. And covid is not ever disappearing for the rest of human history, contrary to what some people think. What form or level of infectiousness the virus takes on year after year, as well as vaccination rates, will determine the amount and type of ongoing testing. And even if testing were to stop permanently in a year from now the amount of revenue pulled in from covid testing will be huge, and that revenue will go towards growing and expanding the company... I hope. That is, I hope it is not wasted on a buyback or some other ridiculous decision. I don't view the fully diluted share structure of 425 million share as an issue. It's nice to have liquidity in a stock. Have you seen companies like DML or WM? It doesn't seem to affect their share prices from moving well over a dollar with a negative EPS.
So I mentioned a $60 million run rate for the year, based on the $30 million the company took in for the first half of the year and some people have an issue with that. I don't now what the issue is, that is exactly how a run rate is determined. You take the current revenue numbers and extrapolate from there. The number could be higher, the number could be lower by the time the year ends, only time will tell. So then the issue is, this is not EBITDA. Well, if I remember correctly the EBITDA was positive and $10.4 million. So what's the issue??? You have micro/small cap with a positive EPS. Is this not worth giving it a least a 10x valuation based on revenues considering so many other companies with a negative EPS are getting higher valuations???
So currently, DM has a P/E ratio of 7.7x A company can only have P/E if they have a positive EPS. So keep this in mind when comparing DM to other companies. So what does the P/E ratio tell us?
Typically a P/E ratio 0-10 is possibly a company in decline (I think most would agree this is not the case with DM at the moment). 10-17 is considered fair value. 17-25 is either overvalued or the company is expected to increase earnings. 25+ high expected future growth (could be a speculative bubble). However, don't confuse the P/E ratio with the 10x valuation I've been placing on the stock.
Actually, I'm tired of writing at this point and about to fall asleep. I'm not going to do all the homework for people. But go ahead and compare DM to a number of different AI companies and healthcare companies and you with notice it's probably the only micro/small cap company with positive EPS and therefore a P/E ratio. And all those other companies have a negative EPS and yet they are currently trading at 20 - 30x their current revenue run rate for the year. DM is trading at 1x.