Post by
deepthinker63 on Dec 02, 2018 8:44am
Notes
They had been giving us two metrics: recurring revenue % and and monthly/yearly XV subscription rev. No mention of those that I can find. Those had been in CEO letter.
They key for this company is to grow revenue. There are small gains to be had from expense control, but the big gains are going to come from growing top line.
Sales and marketing expense is variable, but the other expenses seem relatively fixed. So every $1 million incremental rev from here in out will add about $400K in earnings, if GM’s don’t decrease. So, if they can go from $14 million rev this year to $16 million next year, that should increase earnings by about 2 cents a share. If they get to $20 million in 2021, should be earning 6 to 8 cents, which values stock in the $1.50 range.
Comment by
deepthinker63 on Dec 02, 2018 8:52am
That was using a 20x multiple, pretty conservative. They other change that could happen is a further improvement in GM, as software subscription % grows. That would allow earnings to grow faster still.