WBT (ASX) Valuation discussion / thoughts?

Originally posted by Harmattom: ↑

@dangel35 trying to value wbt on what is locked in and known is too simplistic i believe

what we know about the industry:
1. disruption constantly happens .. think hard disk to usb . . think old school cameras with film to digital camers and then to mobiles . . think mobiles . . nokia and blueberry ruled.the world . . think smart tech and iot . . think the intelligence built into your car
2. adoption of new tech can happen at light speed especially when the new tech is better/ faster - think dvd over vhs. the dvd player still represents one of the fastest tech updates humans have ever experienced even though vhs was totally engrained and established and actually worked pretty well.
3. semi conductors are the oil of the 21st century. anything that will enhance that 'oil' will be in huge demand
5. existing memory technologies have hit walls - speed, scale, resilience etc. the next evolution of tech NEEDS better memory. just like the iphone needed a tech leap to be possible . . there is a whole swathe of tech pit there waiting for better memory.
6. it is a very competitive market . . if one big player makes a successful move then the others need to counter or they risk being left behind.
7. reram is looking like the absolute favourite to be the next tech memory solution (outside of tsmc) and fact tsmc has something is huge bonus as it dictates other major fabs will NEED to respond.
8. industry is about product and people . . wbt dominate the people box and product is looking amazing.
9. it takes a teuck load of time to develop and proove a new tech but once the formula has been made (tape out = tick) them effort to roll out to others is massively reduced = ability to have massive speed of uptake

if you want to value on today then yes you can say skywater has 200m of rev that could used wbt reram which could generate say 3% royalty = $x revenue x y p.e. = valuation. to do that though would be like looking elon musk in the eye and say you make 100k cars a year and make $10k per car so you should only be worth $xy. same with Amazon . . and countless other disruptive stocks.

if you use that model i think you have a severe risk of not fully seeing what wbt can achieve and be focused on a $4 or $5 valuation . . i much rather look to questions like:

a) how many fabs could we be in in 3-5 years . . many multiples
b) is there any limits on scale of chips that can be produced i.e. revenue caps - none - only limited to fabs capabilities
c) what is semi conductor outlook for next 3 yrs - huge
d) is there indistry need for reram - massive.

then as someone else posted earlier i like to look at market cap and we have a few comparables. brn from tech - currently 3 x wbt mtk cap and has shown that asx is happy to throw a multi billion dollar value on disruptive tech stock. second comparison is afterpay - it just makes the list as it was a disrupter . . not a complex one but it did disrupt . . and reached 30bil mkt cap.

my ultimate attraction of wbt and why i feel it will command a huge valuation is (1) that once business is won i.e fab agreements / customer contracts they should be locked in for long term. they wont need to repitch for the business each year like many traditional sales. (2) margins on that business 'should be' fantastic and will only increase over time. (3) any won busi ess basically then creates auto pipeline of other customers who will be forced to upgrade . . having skywater will force other fabs to the table .. signing a customer eg in the IoT space will force other IoT producers to the table as their peoducts will instantly become inferior. this is going to create a domino effect that will see new fabs and new cusomters being attracted to wbt like moths to a light . . which in turn will attract more. and every time an agreement is signed .. wbt (and the market) can bank on that revenue for years!

once the market sees this happening watch the p.e. spike and watch the market cap balloon.

can you put a valuation model on that . . nope . . i just say best time to buy wbt is whenever you have cash available (imo). then lock them away and check on them in 3 yr . . 5 yrs . . 10 yrs.

Expand

Not a single sell line offering more than 10,000 shares on the ASX until you get to $2.74. Yet the SP just being walked down in tiny increments with buyers gratefully snapping up the scraps. What are the sellers thinking? Guess they haven't read your excellent post. Oh well ... guess Forrest Gump was right ... stoopid is as stoopid does.

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(20min delay)
Last $1.77		Change -0.065(3.55%)		Mkt cap ! $367.8M

Open	High	Low	Value	Volume
$1.81	$1.84	$1.74	$737.8K	412.9K

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