This is factual and very powerful analysis. If these revenue...

This is factual and very powerful analysis.

If these revenue numbers are achieved in the new (and current) financial year, a reasonable revenue multiple is probably 15-20 times.

This would yield a low valuation for LiveTiles in the next 12 months of $675 million (15 x $45m) and a high valuation of $1 billion (20 x $50m). This compares to the current market capitalisation of $280 million and revenue multiple of 18.7x.

The low valuation means the anticipated share price would be 2.4 x greater than the present share price and the high valuation would be 3.6 x greater.

It is also worth keeping the risk-reward trade-off in mind. LiveTiles already has an established track record of revenue growth and has clear and articulated strategies for future revenue growth such as joint marketing strategies with Microsoft, partnership with a key Microsoft partner, acquisition, and greater marketing penetration with existing customers. Topping it all off is the underlying growth of Microsoft's markets which the products of LiveTile's serve. It looks like a pretty reasonable risk-reward trade-off. These things are all established facts rather than dreams for the future.

This is why I think, as per my recent post, that it is likely more institutions will move onto the LiveTiles register. These kinds of potential returns are hard to come by and cannot readily be dismissed.

I still think this stock is flying below most peoples' radar5