At least $1M sales should be booked in FY17e, we forecast $3M
We forecast sales of $3M (7.5k units) in FY17e, $19.9M (50k) in FY18e and $39.9M (100k) in FY19e. We note that Bragi following launch sold 100k units in its first six months, while Forbes has quoted a revenue estimate for Doppler Labs of US$100m in 2017. So we expect our assumption are relatively conservative. Also, ca. $1M of the $3M in sales are from existing preorders awaiting shipment.
My thoughts on the above - $1m of the $3M we are forecasted to make in FY17 are from pre-orders, So we need to sell roughly 6,500 units in 6 months to make up the additional 2M in sales. (2Million divided by $299 retail price). If we made 1M in sales from a few magic listening tour dates with a prototype sure as sheet we can sell 2m worth in 6 months after we launch. Give it a week after the launch on Jan 5th and check out the reviews on social media, if they deliver what has been promised the IQ buds will sell themselves. The report says they are conservative, that could be the biggest understatement of 2016.
Peer valuation shows NUH valuation upside
Recent earbuds startups Bragi valuation has been estimated $175M von $22M raised in 2015, and Doppler Labs $150M on $24M July 2016 raise (source: NUH). These valuations highlight the upside potential for NUH, especially once the company commences shipping product.
My thoughts on the above - Either the above valuations are overvalued as they are multiples of NUH market cap or we are undervalued. The research I have done on Bragi is that they have taking full advantage of being first to market, they're great to use while working out, but there sound quality is average compared to Samsung's offering the Icon X. Bragi's battery life is superior to Samsung's when streaming music.
Doppler Labs are similar to the IQ buds but have continued to push back there launch date.
Are we only worth 1/3 of Doppler Labs? We launch in 3 weeks not 3 months.
The IQ buds and the other 3 earbud mentioned above all retail for around $280 -$300. Why would you pay $300 for the Icon x or Bragi's offering when you can get better sound quality, longer battery life, sound awareness control, hearing boost plus whatever else I have forgot to mention.
Anyway lets hope Flextronics can keep up with the demand once we launch. I sure hope they are making more then 6500 units this financial year.
NUH Price at posting:
8.2¢ Sentiment: Buy Disclosure: Held
(20min delay)