COOL Facts:
To date the bears have not been able to debate, or counter the scalability dynamic, that is truly attainable. COOL's cost of acquiring customers are the lowest of any etailer, and actually lower than any start up brick and mortar retailer.
COOL increased customer base last Q, while decreasing marketing expenses. This is the trend, and it will continue.
Currently COOL has 390,000 customers, which generates about $400 per customer annually. This metric alone should tell you that COOL is doing some very dynamic things, and doing them right. COOL's customer list is growing at about 18% per Q. At this rate, six Q's from now, COOL will have over 1 million customers. Some analysts have online customers base growing much faster. So, its apparent that revenue estimates of $400 million annually can be made. With improving margins, one can argue gross margins of at least 55 million dollars, especially with high margin product mixes being added. Now the question is, can COOL achieve this revenue grow, with the approximate current expense levels, (or slightly higher). The answer, if you buy into the scalability dynamic, (which should be clearly the debate) is a resounding yes! And bamm, you have a profitable company.
Now, going further into the future, say another 12 Q's, you get a customer base of over 7.5 million customers, generating over 3 billion in revenues, and over 410 million in gross margin. Even tripling current expense levels, still leaves over 250 million in operating income. Pick a multiple for predicting stock price. This is the scalability potential of this new model. And this dynamic is definitely worth betting on IMO.
And COOL is one of the best new companies in this area. And at these levels, COOL is a great opportunity for the investor.
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