EARNINGS PROJECTIONS.........................
OPTIMISTIC, BUT FOOD FOR THOUGHT
Curtis,
You started the game, then the news came out on NBC and you forgot about the
game.
My numbers from the game re copied below. The determining factors are the
guesses regarding the estimated sales price of each computerized thermal
imaging system and the estimate of the number of systems sold during the first
year after FDA approval.
What are your guesses for estimated sales price for each system and the number
of systems sold in the first year after FDA approval?
What's your guess reagrding the sales price of each optical memeory card used
to store the images? This may be akin to the cost of the xray film and
processing fee.
"I like this game.
Let me try. I've got a degree in mathematics,too.
First let's make some assumptions or educated guesses.
Let's say that the computerized thermal imaging system sells for $200,000
each.
Then, since there are 12,000 breast imaging centers in the US, let's assume
that conservatively 10% of those centers buy one computerized thermal imaging
system each in the first year. That's 1200 systems sold the first year.
So, 1200 systems times $200,000 per system is $240,000,000 in gross sales the
first year for the systems only.
Next, let's assume a profit margin of 35%, which is also conservative.
That means that the first full year's profit from sales of computerized
thermal imaging systems would be 35% of $240,000,000 or $84,000,000.
Then, let's use Chirodoc's number of 50,000,000 fully diluted shares. The
earnings per share in the first year of sales of the computerized thermal
imaging system would be $84,000,000 divided by 50,000,000 shares or $1.68 per
share.
So, again using conservative numbers, the current market multiple is a p/e of
about 25 gives us a stock price per share of at least 25 times $1.68 or $42
per share in the 1999 or year 2000 time frame.
That's for the system only that doesn't even count the profits from the sales
of the optical memory cards that are used to store the images.
There are an estimate of 30,000,000 mammograms done in the US evary year.
Let's assume a profit per card of $10 and a first year market penetration of
10%. That would mean an additional profit of $10 times 3,000,000 or
$30,000,000 in the first year. That's $30,000,000 divided by 50,000,000 shares
for an additional profit of $.60 per share.
$1.68 per share plus $.60 per share is $2.28 per share.
$2.28per share time a p/e of 25 gives us a price of at least $57 per share in
the first year.
The calculations above are based on educated guesses. If any of you have
better numbers let me know we can plug in the numbers and turn the crank. The
calculations are easy.
Of course, I could be right or I could be wrong. Everyone should make their
own investment decisions."
Good luck,
MR.XXXXXXX |
