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I know the feeling Cash, been around since March. I am trying to "value" this company. Currently, SCS has a market cap of about 26.9M CAD. With revs of 120,000 USD per month, that's 2.1M CAD per year. So, SCS is currently trading at 12x current revs. If revs double in the next year as a result of the HitchHiker deal that still implies a forward multiple of 6x, assuming the total shares o/s don't increase. Obviously, growth rates will have a large impact on valuation. But I'm wondering if SCS, on a back of the envelope basis, isn't already being given an "aggressive" valuation. By comparison, other Canadian "Net" stocks, like MCF is trading at 6x expected '99 revs, ECG is trading at about 4x current revs, and BIT is trading at 4.5x '99 revenues. I have not looked at BIDS. I am also very impressed with SCS's model, but I think management needs to better clarify what the impact that these contracts will have on the revenue side. While I understand that competitive considerations limit SCS's ability to contain these numbers in the PR's, it would go a long way to helping investors value the company. I guess we'll have to wait for the financials. Good luck. |
