Snake its the market share number I think Fosters have wrong ....
"We value NUH at $0.18/share by DCF using 12% WACC, terminal growth rate 2.5%, long-term FY21e EBIT margin 15% and assuming ca. 2% penetration of the earbuds market. We assume earbud market itself to be 14% of total hearable market."
They actually use 1.9% in their calculations. They assume IQBuds will get 1.9% of the earbuds market!! My question is, if that's correct, who gets the other 98.1%?
And if that figure turns out to be 3.8% - double their valuation. If its 20% - what happens to their valuation then?? Do your own calculations using the Fosters report calcs with a higher market share.
On top of that they have ONLY considered the earbud market. What about the hearing aid market, the school market etc.
Its not the margin unpredictability that's my issue with that report.
NUH Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
(20min delay)