BUD: Where are we? May 2018, page-12

until you map a revenue or earnings - pre or post tax - put it over the issue base and then apply a market multiple, talk of x share price is baseless. no offence - sure its well intentioned

Simplistically - if BUD generates $69.3 over 3 years - it will be a progression something like(v roughly extrapolated) - $6m, $19m, $44m. thats simply how the math builds. There is some scope for big one off orders suddenly changing the curve radically from one year to the next.

(ie actual new sales are going $6m, $13m, $25m.)

but until you see something like that i would have to assume its going to be incremental system growth

If you assume a 20x price to sale multiple (ie avg stock market sentiment) you'd expect , $880m/1.15bn = ~77c/share 3 yr target

So there's approximately a 77c 'theoretical' 3 yr stock price - depending on if share base remains same, rate of growth, market sentiment etc.

ie thats why i said the other day at 10.5c market was assigning 5-20% chance company will hit its 3 yr guidance

the x factor for the sp is annuity base of sales - because high sales yr 1 and 2 will increase market certainty re yr 3, 4 and 5. ie if you sold $19m in yr 2 that is 95% guaranteed to repeat into yr 3 and $13m into yr 4

ie you can almost certainly assume that if BUD is doing ~$44m in sales in yr 3 - it will have $36m+ of repeat income in yr 4 (im treating this as if its all Ohm 3 yr annuities)

~20x sales is what companies get when they have high sales growth but still have to repeatedely win the same existing clients back the next year

So an annuity business will generally be on a much higher p/s ratio because it has that much higher degree of future certainty

thats the conceptual upside - all very nice and aspirationally enticing

but you have to mark that back to whats actually been proven to date. hence current sp.

also points to consider re your note - you need to bear in mind 82 incremental systems at start of 3 yr phase is possibly a tad high - depends on what systems paid increment in Dec qtr.

ie if $10k in december qtr was 10 systems avg one month partial billing period from old 2017 original company installs then those became $30k in the march qtrly - decreasing number of inferred new systems commencing

anyway - its not something we can answer.

we know at least from the income levels its above 30 with 99% certainty. ie 30 systems at $2000/mth for a full 6 months billable would be $180k. - given the uplift from Dec to March thats not what happened.

and there's the complexity that we;re talkign base system equivalents - some clients will have more sensors etc and so overall installed systems are actually lower

whether its 40 or 130 base system equivalents though is impossible to tell without knowing the mix of $1000 vs $2000 systems and the period from when billing commenced.

just keep in mind its an absolute minimum 3 months and avg ~5 months from an install occurring to a payment being reported in a 4c - on the one month trial basis contracts.

add a further month minimum to actually sell and arrange most 3rd party installs on my reckoning

eg. its possible 3rd parties pay BUD the day they receive cash rather than wait the full month they are allowed. Its also possible to bill clients the month the service occurs rather than ask for payment the month following.

but both those are not common practice. i doubt they occur.

thought i'd add that to the mix since you are trying to map out a future monte carlo mainline scenario