Good comments all around. You guys have a keen interest in this stock and it shows. Ivan, even though ZILA may have obtained permission from the shareholders to issue as many as 50 mill shares, to date they have only issued have as much: 24.6 mill. After all, 50 mill shares at a price of $8/shr. would give ZILA a market value of $400 mill! Even a dye-in-the-wool ZILA fan like me would have to recognize that as a pretty rich valuation. I found a post in the AOL board from a guy named S. Barnes (credit where credit is due) and I find his analysis almost impecable (he is responding to another guy who was predicting $26/shr. by the end of the year):
"If we add up revenues for ZILA and BDTC, we get something like $36 million. Zila presently has about 24.6 million shares out. The BDTC acquisition will add about 5.28 million shares (assuming the highest end of the range) and the CTM acquisition will add about 0.644 million shares. Total shares outstanding, assuming the completion of these acquisitions per the terms outlined, will be about 30.524 million shares. So, taking $36 million in sales divided by 30.5 million shares gives us sales/share of $1.18. At the present price of close to $9, that's a price-to-sales ratio of about 7.5, which is pretty rich.
The proper valuation however, should include some realistic estimate for OraTest revenues, and that is the $64 million question. (inflation, you know)"
What's a realistic estimate for OraTest revenues? Who knows. I don't think that even Joe Hines knows that. But if we keep the same 'rich' price-to sales of 7.5, in order to reach a more modest $12/shr price for ZILA by the end of the year, we'll have to reach $50 mill in sales, which means OraTest will have to kick in $12-$14 million! Ain't gonna happen guys, at least not this year. By the way, did you notice the big yawn the market gave to the announcement of last quarter's earnings?
Sorry about the length of the message. Regards to all. Julio |
