...WELL might be worth $0.50 per share in two years, or it might be worth $20 or more.
The problem is that this company is a hot mess of acquisitions, complex accounting (other might use a different adjective), and a non-intuitive investment thesis.
Someone is going to be right, but I am not smart enough to know who. I will have an opinion once I see the year end financials and all the disclosures.
A while back I posted a message which read: "Stock still looks expensive, Assuming the following:
- opening operating CF of $32million (LQA)
- operating CF growth of 50% per year for 10 years (organic and inorganic)
- operating CF growth of 10% per year thereafter in perpetuity
- annual equity increase of 10% per year
- a required rate of return of 25% per year
This thing is worth $4-5 today. So bottom line, it is fairly valued.
If you want to challenge the assumptions, feel free. But note that I have been very generous on the equity increase assumption."
It wasn't well received, so I do chuckle when I see boosters using the same methodology to justify a double digit stock price.
Updating assumptions (updated numbers highlighted):
- opening operating CF of $100million (which everyone claims)
- operating CF growth of 50% per year for 10 years (organic and inorganic)
- operating CF growth of 10% per year thereafter in perpetuity
- annual equity increase of 10% per year
- a required nominal rate of return of 30% per year (given higher base rate of inflation)
Based on that, this thing is worth $10 per share...not enough upside to make a bet without better info.