I notice a lot of the discussion is centered on news releases and share price "pumps." While fun and exciting, as a person who has been in KNR since sub $1, I would like to start a conversation centered on what we conservatively believe to be the underlying value of this business. At the end of the day this is a flesh and blood business with real revenue and, as we all know, tremendous potential. This is my assessment and I would like to hear from others:
I see this as two engines: (1) The primary business, (2) BioCloud
(1) The primary business
Paul has said, for nearly a year now that the company is seeking to grow to $100 million in revenue over the next few years. While quite a feat, this company started at $1 million in revenue in 2016 to $16 million in revenue in 2020. Even at a finished growth rate, it is not inconceivable for them to reach their stated goal by 2023/2024.
Paul has also stated, repeatedly, that at 50-100 million in revenue businesses in this space become takeout targets by the likes of Honeywell, Jonson Controls, etc. at an industry standard of between 3-4 times revenue, this business, in 3 to 4 years time should be worth between 150 and 400 million, without BioCloud. This is what piqued my interest in the stock when it was a $30 million market cap company. Sadly, I found out about the company when it was a $10 million market cap but really took time to do some DD before pulling the trigger.
(2) BioCloud
This is the wild card that brought a lot of you here. I remember people building "models" for a higher price based on 20,000 units per month (max capacity) and $12,000 per unit (full price). Both of these are extreme and optimistic. Let us be conservative:
5,000 units per month (25% of stated capacity) at $6,000 per unit (half price). I'll also assume the provide replacement cartridges at 0 profit just to be excessively cautious. This brings us to $360 million in revenue, without the core business's $16 million. At $376 million in revenue this can conceivably be a $1 billion dollar company (call it $30 per share give or take a few dollars).
The issue we must consider is timing..tomorrow is a quarterly earnings release, hopefully we also get more guidance concerning BioCloud, but from what we know id say things are moving in the right direction. The reality is that the average "100 bagger" takes between 16 and 30 years to develop. That doesn't mean it can't and hasn't happened sooner, but even if you conservatively assume this can become a billion dollar company, does it matter if the developments are this week or next week? It doesn't to me. I think everyone in here would be happy if someone who was omnipotent told you your investment would be worth 10x in 2-3 years...if we all agree this at least has a greater than 50/50 probability, then this week or next week are irrelevant provided you trust management and the business.
curious what other assessments are.
-MicroCapKid