Post by
tradersam99 on Mar 23, 2021 5:35pm
OK, Let's Talk Chip Shortage, and What is Means for Spectra7
The Bad news: Yeah, it's there.
The Good news: While a global chip shortage means fewer chips and longer lead times for Most chip companies, and leads to Lower Sales & Revenues for Most chip companies, Our little, tiny Spectra7 is in a different position.
No, I'm Not going to try and spin the shortage into a Good thing. What I Am going to say, thoguh, is simply This: Most companies Will have lower sales as a result of the shortage, but evne with fewer chips being produced, Any siginifcant percentage will Increase Spectra7's sales and Revenue Dramatically.
And, of course, that is because they are starting from such a small amount of sales and revenue. So, the end result is that Even If Spectra7's chip supply is 20% or 30% of what normal-year capacity would have been, that Still means revenue Increases of Hundreds of Percent!
Say, without the shortage, Spectra7 would have supplied just 30% of its $200 Adressable Market for 2021, that's $60 Million in revenue.
So if they only are able to supply 30% of That capacity (30% of $60 Mil), that would Still be $18 Million in Revenue for the year. Their Highest revenue per year By Far.
And at 5 times Sales (standard for a growth tech company in its upswing phase), that would be a Market Cap of $90 Million, or Three Times Today's Market Cap, for a Stock Price of around 0.15 a share.
And that's Forward-looking P/S, so that is what Spectra7 is worth Today with Just 30% of Only One-Third of its Adressable Market!
With 100% of 100% of its Addressable Market, the Market Cap could be (5 x $200 Mil) $1 Billion, or about 30 times its Current Valuation, for a stock price of around $1.50 per share.
So, basically, depending on how quickly the global chip shortage gets resolved, Spectra7's Per Share price is worth between $0.15 a share and $1.50 a share, today.
Comment by
JACKTHEBEAR2 on Mar 23, 2021 6:57pm
Makes you wonder when that 30% of 200 million will start to come in ?????
Comment by
ypl6r1 on Mar 24, 2021 5:38am
Who said the Global Foundries and/or TMSC will ever bother prioritizing S7 chips orders while they have way larger orders from whale companies in the queue? And some say the chip shortage will last 2 years. Also, copper shortage now...