OK, so Im reassessing my position. Do I remember right that they said they would have 60% GM on each unit sold at $300? So on that basis, are we losing $20 per unit made now at $100 instead?
Lets say each unit is break-even though....
Based on $9.95/mth, 85% retention and 85% GM, that means each unit gets $86 Gross Profit per year.
For a MC of ~$100M, if we assume PE of 20, we need NPAT of $5M pa. say that means $7M EBITDA and then maybe $10M of Gross Profit. That means we need about ~110k units sold to justify the current MC.
Is there anything Im missing here? Too much on sales overheads?
So what does 110k units sold look like? Well, 460k kids with asthma in Australia. 25% of the market would do it. So how fast can RSH grow to that market share? Is that a reasonable short term growth aspiration?
The upside? Well, the US has more like $5.5M kids with Asthma. Even 10% of that market would mean this is closer to a billion $ business and a Disallowed.
The question is how far would that be away?
RSH Price at posting:
14.0¢ Sentiment: Hold Disclosure: Held
