I'm not sure the upcoming numbers will be significantly different this early on the back of watch sales. In November they advised a first 12 month sales target of "closer to" 10,000 watches. In December they advised sales growth of 50% and 120% in consecutive weeks. To have growth of 50% and 120% is great but it must be off a relatively low base otherwise the 12 month target would have too be much higher than 10,000. E.g., if they were selling 50 per week and grew at those rates, weekly sales would have grown to 75 and then 165 units. Even if sales growth then completely stalled sales would still be 165 units by 52 weeks = 8,580. If growth in sales continued, the target would have too be much higher than 10,000 unless weekly sales were below 50 per week when they reported those growth rates in December.
My point is that while reported growth rates look very promising, current sales volumes must be relatively low and not likely to impact the 6 upcoming month financial report significantly off of just the first few months of watch sales. As that growth rate continues and sales numbers pick up over the next 6-12 months from here, then we can start looking for the impact on the financial numbers.
"Mr Fortunatow says if the AllMyTribe and Spacetalk business continues on its present course, within 12 months revenue from Spacetalk and the company’s AllMyTribe division will be on track to approach and even exceed current annual revenue levels generated by the school business” That implies revenues around $3mill and I would hope a gross profit from watch sales of at least 1 million in the first 12 months and with strong growth. That would suggest this company is quite undervalued and should be trading on a high forward PE ratio while sales growth remains high. These numbers do not factor in potential sales from the current marketing to overseas re-sellers.
MWR Price at posting:
$1.00 Sentiment: Buy Disclosure: Held
