173,777,847 RCE shares on issue x $300 = $52,133,354,100 MC. No allowance for dilution.
What would it take to justify a $52B MC? Revenue & heaps
Comparing to CSL = $126.5B MC @ PE circa 35 = $3.6B NPAT, EBIT $4.7B & Revenue $11.4B.
Revenue multiple = x11.1 so using this metric RCE would require $4.7B revenue.
EBIT multiple = x26.9 so using this metric RCE would require $1.93B EBIT.
PE multiple = x35 so using this metric RCE would require $1.49B NPAT.
Given the enormous size of the market, if RCE products are successful in trials the above seems attainable. With the patent protection they can dominate market share during the first decade of production. My long term target for RCE if successful & not taken over has always been $50B+ MC. Enormous upside but have to keep in mind that very few biotechs are successful. That is why the odds are currently 300:1. Time frame most likely 5-10 years range & possibly beyond. CSL didn't become a $100B+ MC overnight.
With each successful stage of trials de-risking RCE the MC will go up & the 300:1 odds will go down accordingly.
RCE Price at posting:
$1.13 Sentiment: Buy Disclosure: Held
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