Ok - lunch time near a computer, so here is a worked example of...

Ok - lunch time near a computer, so here is a worked example of how I've thought about it.

All of this data comes from the Investor day presentation (1 May 2017):

Before Teva acquisition, the company managed about 15% per year (annualized). Teva was transformational, and it still has a lot of upside. The company believes its revenue for 2017 will be around $560mln AUD (assuming a 73 cent exchange rate). Let's be mean to the company and assume an 80 cent exchange rate: that would put us closer to say $510mln.

The investor presentation in may summarised it quite well - Teva meant MYX can access USD$4.3bln in market opportunities, and after the acquisition, they had roughly 20% market-share by value. As all the Teva products come online, we'd expect to see about US$860mln - let's assume things go wrong, and discount that by 15%, in a few years we'd expect to see about US$730mln revenues flowing into the company, that's about AU$910mln. So, we're likely to see 78.5% growth over the next three years as these Teva products come online. That annualises out to a growth rate of about 21%. We're going to ignore the company's pre-Teva growth-rate because the Teva acquisition was literally an order of magnitude.

The generics market is also growing at about 7.5% per year - but we're going to entirely ignore that for our purposes because the Trumptastic Tangerine Terror is unpredictable and we can't bank on it.

So you see how so far I've rounded down each step of the way? that's because I'm conservative and trying hard to keep myself away from the hype-train. But we've got to a forward growth rate of 20%

Using today's "mid-point" share price, let's call it 95 cents, with a forward projected earnings of 10.6 cents per share (from investor day presentation), let's call it 10 cents even, we get a PE of 9.5

PE of 9.5 divided by 20% growth rate, gives us a PEG of 0.475, let's call it 0.5 (a higher PEG indicates a more expensive growth rate).

95 cents / 0.5 = $1.90

Less my safety margin of 15% = $1.615

Does that mean I hit sell around $1.615? Well, probably not - in my mind that's the "inherent value" of the share based on it's growth, all other things being equal. To determine if the company remains a good investment, I'd look at a few other points like price to book value, comparative PEs of similar companies, balance sheet health, cashflows v debt and so forth. The average analyst target price is $1.90 within two years.

My average cost is $1.04, so if I could sell around $1.90 in two years time, I'd have made an annualized return of about 37%, which ain't bad. Would it be a good time to sell in two years time? Well, if the valuations moved significantly above my projected prices, I might decide to sell out - if it moved to "fair value", I'd likely to sell half my holding, and move that money into another opportunity.

Don't take my word for any of it, though, this just outlines how I think about valuation - there are better investors than me with better analysts and frankly you're probably better off listening to them. This kind of analysis really only makes sense for a mature company - it breaks completely when you have a startup, or a cashflow negative entity (to be fair, at the moment MYX is cashflow negative - technically at least).

I'm sure many of the hot-copper regulars would happily critique approach. But I've tried to answer you honestly and directly - do you own research and learn about these concepts and best of luck