It's a concept called "multiple expansion." A s

It's a concept called "multiple expansion."

A stock's pps is often expressed in relation to it's eps (earnings per share), aka a price/earnings ratio or p/e ratio. This ratio implies a multiple that is a relative determination of whether the stock is under- or over-valued, because over decades if not hundreds of years, all of our current industries have established average multiples that we can compare current multiples to, to try and get a sense of whether a given industry should be sold or bought.

When the economy in general or an industry specifically is expected to experience growth, history has shown that this justifies higher multiples of average p/e's. ESPECIALLY in a low interest rate environment like we have now. This is called multiple expansion.

So when future revenues experience a perception shift and go from uncertainty to certainty, history would suggest that the stock should now be able to support a higher multiple than it is currently. The license is what creates that critical shift from uncertainty to certainty, and that shift expands the multiple.

At that point the focus is going to turn to revenues, which is a whole 'nother story.