rising revenue and wide moats , page-4

Gotch, you are right about the number of shares on issue - it is about 97m. Your estimate of profit margin at 30%, I suspect, could be on the low side. Costs appear to have plateaued around the $4m per quarter level, and analysis of recent quarterly figures suggests margins may be 60%+ for revenue in excess of that (cost) level. When revenue is in the $100m zone, such figures will be lost in the blur.

That means that we can project pre-tax earnings of $80m+ when revenues reach the $160m which looks likely in three years time. That yields after-tax earnings of around $56m, or about 58c per share. Picking an appropriate PER is still a guessing game, but most successful, rapidly-growing biotechs seem to be able to justify a PER of at least 25, some much higher. What do you think is reasonable?

Cheers, Prime