Premier Health of America Inc V.PHA

Updated estimates of FY2022 finances

[colourama]

Now that two quarters of FY2022 are in the books, I thought it would be interesting to see (in a simple way since I am not a financial expert), some basic estimates for the year, to get a hold where we are.

Revenue:

So far PHA has $36 million in top line revenue through 2 quarters. Add in 1.75 quarters for the new acquisition, estimated at $24/4 = $6 million per quarter, and assume that the next two quarters give us the same $17 million each for the current business. This gives $36 + 2*$17 + 1.75*$6 = $80 million in top line revenue. So at our current market cap, we are trading at $26.8/$80 = 0.34 times sales.

EBITDA:

So far PHA has $1.95 million in EBITDA. Take the most recent quarter as a bearish conservative estimate and add back the non-recurring expenses:

• $0.3 million for the implementation of a new ERP system and computer expenses
• $0.3 million for transaction costs related to their acquisition

I get say conservatively $1 million in EBITDA. The new acquisition adds approximately $3 million EBITDA per year, so $0.75 EBITDA per quarter, say. So a conservative estimate is $1.95 + 2*$1 + 1.75*$0.75 = $5.3 million EBITDA for the full year. At current market cap we are trading at $26.8/$5.3 = 5 times EBITDA.

If they return to their usual $1.5 million in EBITDA per quarter, then the business is seeing 4*$1.5 + $3 = $9 million in EBITDA and we are trading at under 3 times EBITDA.

Of course there are other perhaps better metrics that one should use to value the company and I welcome any corrections. But is the negativity on the company just market sentiment? It feels like everyone is pricing it as if the company is a failure.

Very frustrating, but I'll continue to pick up a few shares and check back in August to see if I am the fool for viewing the company more positively.

[Torontojay]

Hi Colourama. It's nice to see a financial forecast for the year.    Year to date we get ~ $36m or the equivalent of $18m per quarter. R~ $36m + $18m*2 + $6m*1.75 =$82.5m  Or, if we use second quarter as a lower bound for the next 2 quarters we get  R~ $36m + $17.5*2 + $6m*1.75 = $81.5m It is not clear if costs related to Erp will continue for the next 2

[Torontojay]

$7.4m in ebitda using a 10 times multiple gives us a share price of ($74 - $5.73 - $14.5)m  divided by the total number of shares outstanding (55.84m) gives a share price of about 93 cents. If we use a 14 times multiple then a fair price would be $1.49.  $8.6m in ebitda using a 10 times multiple gives us a share price of $1.18. At 14 times we get a price of $1.79.  Given the

[colourama]

Hi Torontojay, thanks for your analysis. Are you including the $6.3m in cash the company has in your above numbers? I am assuming that the -$5.73m is their existing net cash (cash - debt) prior to the current acquisition price of $14.5m, but thought I would double check where you get this number from. Unfortunately, the share price is telling us that the market is extremely negative on the

[Torontojay]

Hi Colourama, from the latest financials the sum of debt (long plus current= $ 11,153,460) and the sum of lease liabilities (long plus current= $ 933,020) - cash on hand ($6,352,272)  = $5,734,208  I added $14.5 m (the maximum amount) from the acquisition which is the enterprise value of the company as the purchase price is based on a cash free debt free basis. 

[snootchybootchy]

The market has been very hard on nearly all companies in the sector. The other day, there was this five year chart posted showing the share price of the XBI ETF. It's been very brutal since February 2021. I'm not a technical analysis guy but it looks like we are at bottom and the entire sector won't stay down here forever. 

[colourama]

Thanks for the chart snootchyboochy, who knows where the bottom will be for PHA (and the sector in general). No one is interested in investing here at the moment - perhaps viewing it as a "has been" covid play, or too distracted perhaps by the oil/gas stocks which look to me to have gone parabolic.

[MrBeast]

I agree there is huge upside here at this price when you look at the financials, I beleive margins are the only thing holding it back in that sense. But your right it think the main thing is just the interest In general isnt there at the moment. Patience will be key here, but lets just hope it turns around sooner then later.

[Torontojay]

I agree that patience is the key here. Fundamentals eventually matter in the long run even though it appears they didn't matter last year when prices were skyrocketing nor do they appear to matter now when everyone is pessimistic about the stock market. Somewhere in the middle, when things get back to normal,  is where I believe the fundamentals will eventually converge with its true