Nice day, guys, congratulations, and hope this is not just another hype spike like we saw this time last year.
A little reality check.
Current shares outstanding (fully-diluted) ~ 37 million.
Assume additional shares required to fund operations for the remainder of 99, all of 2000, plus acquire equipment needed to get from $40 million to $80 million, to $250 million = 5 million.
Therefore, assume Y2001 shares outstanding = 42 million.
Assume Y2001 sales = $250 million.
Assume Y2001 net profit margin = 15% (ROV net margin = 4.6%).
Y2001 net profit = $37.5 million.
Y2001 EPS = .89.
Based on these assumptions, the current price of $7.75 results in a 2-year forward-looking PE ratio of 9. Obviously, if everything goes right over the next 2 years and these assumptions come true, the PE ratio would be much higher than 9 by the end of 2001.
But IMO, based on what we know now, a 2-year forward-looking PE ratio of 9 seems quite generous. But who knows, maybe it will get even more generous in the near future. Good luck with it.
Personally, if I had bought in the $5's and the price approached $10 (without any additional confirmation of the above scenario via additional PO's), I'd take some profits. But that's me. Since this thread is filled with multi-millionaires who get the inside scoop from management on a daily basis, I'm sure nobody needs my advice:-) |
