A2m PE and price Forecast with increasing sales, page-3

Naomi, good attempt to analyse A2M (I can see the analytical mind here!), however just a few comments for you to consider (which will lead you to a very different conclusion):

1. The fact that you've used EBITDA and treated it as 'NPAT' suggests to me you don't understand the 'E' part of the P/E ratio. You probably forgot that EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortisation. And shall I add, the once-off losses and adjustments associated with all 'others' that are not captured in the standard bottom-line calcs.

2. The spike in sales in November has a lot to do with 'November 11' sales, which is the equivalent 'Boxing Day' in Australia today, and this is the time when sales is CRAZY. It's dangerous to use this month's data to predict the performance of the rest of the year. Australian retail analysts won't be using Christmas/New Year sales performance to predict the rest of the year's performance, will they?

3. Your analysis has not considered the performance of fresh milk sales in UK and USA, not to mention the product development costs associated with cream, yoghurt, ice-cream, and all the fancy new products the company is trying to come up with.


I've got more comments, but think the above shall suffice for now. (Oh, shall I say, why are there 14 likes for your article without anyone checking the numbers? Hmmmmmm......)