Well just use a standard Valuation model and plug in some numbers. With a sharecout approaching 300 million for ease of math lets just use that.
What is a good P/E ratio for a fledgling tech company....not the ridiculously high numbers for a growth company (because we arent that yet). 10X maybe I think thats fair, lets double it to 20X earnings....not revenue.
So to reach $1 a share on a 20x P/E basis be would need 15 million in Earnings! What does it take in sales to generate 15 million in earnings? Thats hard to quantify, because we don't know what the overhead is or what profit margin we are working on. But lets not forget that most longs here have a well over a dollar average. So basically what I see is, if we have to rely on DL to get us going while Poet is being developed we could have to do around 60 Million in Sales to get to $2 on a 20X PE, which I think is high, 120 million in sales is more like it. But that is kind of the range if we don't have some speculation driving this higher.
This is not the best model to use to value a company like Poet, but it is very standard for a company with predicatble income streams. Since DL is not even doing 10 Million in sales you can see that we have a long way to go for DL to become the reason Poet shares rise. This is why Longs want to see some Poet news, because if we see a major company buy into the idea of using the Poet platform, then the speculation of future sales will drive the price much higher.
BCD
