"Is APT actually overvalued?", page-19

@doubledeckerdog
Many of the long term holders here have been through these many vacuous arguments before.

To any newer holders here I strongly suggest you look at this thread- with price at posting and see the posters who have stuck around versus the ones who have come and gone and what the various arguments have been.
https://hotcopper.com.au/threads/a-little-light-on-the-buying-front.3257408/page-2#post-35075056

Coming back to valuation.
Off Au/NZ alone we are loooking at 6B in sales, >240m in revenue and approx 72m EBTDA if margin improvement continues for FY19. A share price of $10 puts it on a prospective EV/EBTDA ratio of 30x on this alone (for a business growing at c100%pa). In my mind this is actually cheap for this sort of business (particularly compared to more mature companies growing much slower). There is the wildcard upside of US growth (UK unlikely this coming FY) which @webllinks @Permabear @vboy @upside_down @Christos12 will attest that metrics such as app downloads, google trends, instagram followers and web traffic data as well as the company’s own data (300K unique users in 5 months) all suggest viral growth. By my calculations at the recent run rate we are looking at close to 500K users in US by AGM and in excess of 700K users by the end of the cake day year, and quite possibly a larger absolute number of US users by the end of FY19 than AU/NZ. In the latter scenario you have the possibility of a run rate in the order of 500m revenue at the EOFY19, with a strong expectation of >100%yoy growth thereafter given the market size.

So let’s say there is a 20% chance of a deep bear market with prospective drop in EV/EBTDA prospective multiple to 15-16, a 60% likelihood of non-meaningful US growth next year in which case a 30x EB/EBTDA multiple is maintained off Au/NZ alone and a 20% chance of viral US growth with multiple expansion, you are looking at a 20% chance of 50% loss, 60% chance of breakeven and a 20% of 200+% growth with significant runway for further maintained growth for 2-5 years, the risk/reward ratio is still highly favorable. Moreover, on the basis of the available information I think the probabilities are more likely 10%, 20% and 70% (as opposed to 20:60:20).

Unlike you, I don’t profess to know what will happen with the share price or the business execution, just that there is a strong investment case that the probability adjusted risk/reward at these prices is highly favourable...