A simple way of calculating when the share price will get back to $20 is to calculate what earnings per share (EPS) is required to support that share price.
The calculation is $20 divided by 30 (multiple) = .66 (66 cents). Check 30 X .66 = $19.80.
A multiple of 30 would probably be reasonable at a future time when profits are gaining more quickly year on year.
The forecast EPS for year ending 30 June 2025 is only .26 (26 cents) so we have to wait many many many years to get to EPS 66 cents.
So if you purchase an a2m share today at $6 dollars your return over the next year is .26 divided by $6 = 4.3%.
4.3% is not great and that is why the share prices range trades at the command of trading algos. I.e. Pump and dump.
A2m needs a step change in EPS rate of growth and they need to be very careful making capital investments to achieve this.
I hold a2m shares and love the company but the company certainly has fallen into a hole. Can they crawl out of it and prosper.
That's the question for me. I actually don't know the answer.
A2M Price at posting:
$5.90 Sentiment: Hold Disclosure: Held
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