SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Webvan Group (WBVN)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: CMon who wrote (197)6/26/2000 10:30:00 AM
From: egggmann  Read Replies (1) of 464
 
CMon, you're comments are welcome here. It seems that your biggest concern is the current market cap in excess of 2Bln. I look at their plans and see that this is justified by their projected growth.

In very simple terms, (from conference call) their Distribution centers (DC's) should pull 300MM rev or 30MM cash flow.

They intend to have 15-20 DC's which gives 450-600 million in cash flow.

For the grocery store industry which includes all the same low margin high volume characteristics that you were also concerned about, (although I believe that WBVN's margins will be better due to cost savings relative to b&m grocers) we find that the average price to cash flow is 12x yahoo.marketguide.com which would give WBVN a mkt cap of 5.4 to 7.2 bln.

So they intended on having 5-6 DC's open by YE 00 and now with the addition of HOMG they will add seven to that number. They have six more in the works for '01 so it is looking like a good growth story. They aim to have the DC's cash flow positive by their fifth quarter in operation so the company is sitting pretty with enough cash to last quite some time.

I think that the business model works, the management team has it's heads screwed on right, and there is still plenty of upside with the addition of more and more product lines with better margins in the pipe.

Plus this latest deal wipes out the biggest competitive threat and creates cost savings to boot!
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News