Even though the the revenue, number of outstanding
Post# of 15187
Posted On: 04/18/2016 3:17:03 AM
Even though the the revenue, number of outstanding shares, growth rate, stops signs or skull and cross bones are different for each company, what we can do is look at the valuation for RMHB and apply it to HJOE. Most relatively new businesses that are in a high growth area use price per sales ratio (PSR). PSR takes the current market value divided by the past 12 month trailing rev.
If we look at RMHB's PSR its right around 18x.
How we get to 18x - Per report they did ~$600k the six months ending 12/31/2015. Let's say the full year rev is $1.2M. They have 434M shares outstanding and the current share price is $0.05 which puts their market cap at $21,700,000. Divide that by $1.2M and we get = 18x PSR.
Now we have to make an assumption on what HJOE's yearly rev might be. Let's say, when they report, rev comes in at $2M for the last 12 months. Multiply $2M by 18x PSR = $36,000,000 valuation. It's been said that HJOE's shares outstanding is about 1.8B. Multiple 1.8B by a share price of $0.02 and that would put HJOE's market value at $36M. So if you apply RMHB's PSR to HJOE, assuming the numbers above, then we should be at $0.02 per share.
There are a lot of assumptions here - 1.8B outstanding shares and $2M in rev etc... when they report. Also, we have to look at how fast they are growing rev.
I don't usually invest in pinks so I'm not sure what the average pink's PSR is or if there's a better ratio to use. I just wanted to run some numbers to compare RMHB and think about a possible share price for HJOE when they report. After looking at the comparison, HJOE looks like a great investment if their numbers come in somewhere close to $2M.
all IMHO.
If we look at RMHB's PSR its right around 18x.
How we get to 18x - Per report they did ~$600k the six months ending 12/31/2015. Let's say the full year rev is $1.2M. They have 434M shares outstanding and the current share price is $0.05 which puts their market cap at $21,700,000. Divide that by $1.2M and we get = 18x PSR.
Now we have to make an assumption on what HJOE's yearly rev might be. Let's say, when they report, rev comes in at $2M for the last 12 months. Multiply $2M by 18x PSR = $36,000,000 valuation. It's been said that HJOE's shares outstanding is about 1.8B. Multiple 1.8B by a share price of $0.02 and that would put HJOE's market value at $36M. So if you apply RMHB's PSR to HJOE, assuming the numbers above, then we should be at $0.02 per share.
There are a lot of assumptions here - 1.8B outstanding shares and $2M in rev etc... when they report. Also, we have to look at how fast they are growing rev.
I don't usually invest in pinks so I'm not sure what the average pink's PSR is or if there's a better ratio to use. I just wanted to run some numbers to compare RMHB and think about a possible share price for HJOE when they report. After looking at the comparison, HJOE looks like a great investment if their numbers come in somewhere close to $2M.
all IMHO.
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