Sequans Stock Discussion Message Board

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Technology Stocks : Sequans Stock Discussion

SQNS 6.150

+3.0%

12:39 PM EST

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frmrVZguy

To: MUDD1 who wrote (54)	9/6/2020 4:16:21 PM
From: GaryMi	1 Recommendation Read Replies (2) of 222

Re: I would love to see Sequans hit a billion dollar market cap. You and me both. I think your estimate of $200-$250 in annual revenue is about right. Here was my calculation by a different route. It still looks like there break even point is in the lower 20's per quarter. Let's say $25M or $100M annual sales. Beyond that they are profitable on every sale by whatever there hardware margin is. There combined margin is currently around 45% but that doesn't scale because of the very profitable but manpower constrained services side. If we take a PE of 30, 30M shares and a $1B valuation. Doing the math you need to generate $1.11/share in earnings annually or $0.28/quarter. Quarterly profit generated with 30M shares x $0.28 = $8.4 million. If we assumed 30% margin then it would require $28 million (of profitable sales to get $8.4M) plus the breakeven point of $25 million for a total of $53 million/quarter in sales. My 30% margin is a just a wild guess so don't read too much into it. However, generating $1.11/share at 30 PE would place the valuation at ~$33/share. I do think if they can consistently grow their quarterly revenues decently over the next four quarters that the price will appreciate decently even without profitability. We have had lots of promises and high expectations before. But this time I do feel there is some real evidence of solid growth in several markets over the next few years.

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