RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:NoShort - The Bottomless fool, The Tree Planter....- 1:1 is a multiple, so is 0.8:1, it's just math and not uncommon when you use revenue multiples
- you shouldn't ever use revenue multiples. at worst, use EBITDA
- WELL consolidates 100% of revenue even though it owns less than 100% of its divisions. For example, they are touting that Circle Medical and Wisp are >$100mn in run rate as of Q3. Sounds amazing, until you realize that they only own 70% of Circle and 53% of Wisp.
- That's enough to consolidate all the subsidiary revenue so that naive investors use the wrong denominator in the calculation of useless metrics.
- By the time you work your way through all the subs in their AIF, I wouldn't be surprised if their revenue dropped by 30-40% if they used equity pickups, rather than consolidations. You can see on the face of the financials that 26% of adjusted EBITDA belongs to minority shareholders. That's the low end of the range for revenue that doesn't belong to WELL shareholders
Next question?
Noshortsallowed wrote: I do understand the concept of enterprise value and that it reflects factors like debt and their cash position but even when you factors those things in on top of the 300 million dollar market cap reflected in the $1.7 share price you think it should be you are still left with approximately a 1:1 ratio (which itself isn't even a multiple). Stock prices are almost always a "multiple" and the reason for that is that there is an expectation they will continue to grow (which well has proven themselves to be able to do beyond expectations). You seem to say you have accounted for growth but you also suggest they don't even deserve to be accorded a "multiple" to reflect that.