Expected returns to justify $1 billion market cap

Help me out guys because APT does not appear to be a very good value proposition.

After Pay Touch are not cheap by any standard with a market cap of circa $1b and with negligible earnings (-$700k as reported in the H1FY18). Also, APT have a lot of expectation of massive growth already priced into their share price.

I have done some very rough ball park numbers and I am concluding that for every $1B in merchant sales it will generate $59m in revenue for APT with a NPAT of $20m (33%) - not including their first $1B generated which is only covering costs. I have guesstimated what APT may return higher NPAT on subsequent profits - taking into account likely; cost of sales, doubtful debts, finance costs, employee costs and general admin costs whilst giving APT the respect that costs will reduce upon scale.

Reasonably, all risks considered – APT should have a return on Invested Capital (ROIC) of 15% pa meaning with a current $1b dollar market cap APT should return on average $150m NPAT yearly to its investors. To get to this amount APT would need to generate $9b dollars a year in merchant sales or $531m in revenue per year. ($20m X 9) because APT’s first $1b merchant sales has not generated actual NPAT for APT.

That means APT needs to grow its merchant sales by nine times its current size to justify its current mcap price. Considering it will take years for that to occur APT’s ROIC will begin to become naturally diluted by time.

In addition to this, if APT is effected in any increased way by inability to scale, doubtful debts, decreased merchant fees, macro economic downturn or changes to lending by ASIC APT’s ability to reach reasonable ROIC of $150m is challenged.

What I am not understanding is when I hear HC traders talking about APT's SP heading to $8 or a mcap of $2b or any of the other things I hear - are those comments really grounded in any reality? This is especially pertinent when considering APT is already chasing its tail trying to generate the $9b in merchant revenues or $531m revenue already required to achieve a reasonable 15% ROIC of $150m to justify its current $1b market cap.