AEI Valuation Discussion, page-2

(Repost from another thread)



I think AEI should be trading at at least 80c today.

Here are my assumptions:
* $3m revenue per month (conservative, given April was $4m)
* gross margin of 50%
* annual fixed costs of $7m.

that generates the following:
* $36m annual revenue
* $18m gross profit
* $11m net profit (before tax, etc)

at a PE ratio of 20x, enterprise value would be $220m ($0.92/share)

add the value of $14m held cash to get $234m market cap (about $1.00/share).

I would conservatively discount that 20% due to market uncertainty in general, to get $0.80 per share.

obviously these are back-of-the-envelope calculations, so I would welcome any well-researched challenges to my assumptions and valuation process.

obviously DYOR. I’m not a financial adviser.