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Microcap & Penny Stocks : ALYA Cost cutting system via software as well as security
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To: ztect who wrote (1682)8/13/1998 12:40:00 AM
From: Essam Hamza  Read Replies (5) of 2534
 
ALYA Price Projection:

Still working out the kinks so please contribute if you can.

ALYA has signed on 12 distributors for a min of $6.5M for next year. We can expect AT LEAST 8 more to be signed for this year. Each will be for AT LEAST $500,000. So we can expect at least $10.5M from distributor sales next year. The actual number will be much higher but I want this to be a conservative projection so I will only use $10M.

We can also expect more than $10M in private labelling deals but we will use $10M for now.

I will use $20M as next years total revenue projection but like I said this is very conservative and doesn't even include any separate contracts which we can expect.

The profit margin for ALYA's products are between 30-50% depending on the size of the contract. Lets just take 40% as our working number.

$20,000,000 X .40 = $8M in earnings.

Burn rate should be about $250,000/mth as they grow next year. So we must subtract $250,000/mth X 12mths = $2.75M but lets just say $3M.

NET earnings will then be $8M-$3M = $5 million

Fully diluted there are 13,432,882 shares outstanding.

Therefore earnings per share is $5,000,000/13,432,882 = $0.37 EPS

Now the tough part. The multiple. I looked and I looked and I looked and I can't find a publically traded competitor for ALYA. I wanted to find out what multiple we should give AYLA. I've heard numbers from 20
to 50. The parent company of Macdonald Miller (one of ALYA's recent contract signings) runs at a multiple of 37. Like I said I want this to be conservative so I'll use a multiple of 20.

$0.37 X 20 = $7.40 for a conservative projected price for ALYA's stock. Personally I think this number will be higher.

Please help with any changes up or down.

Thanks,

Essam.
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