Netcomm earnings

Hi all,

**I'd like to say up front that I am fairly new to investing.. so please forgive my naivety.. not planning on quitting my day job!**

Netcomm clearly had fantastic revenue growth last FY ($107m up from $85m), but saw a reduction in net profit ($1.8m loss down from $2m profit). I understand that this is due to the significant investments the company made in order to deliver on contracts and to position itself for future growth, so in order to make an assessment of Netcomm's future I've made the following assumptions.


- Assuming Netcomm is able to increase revenue to $125m in FY1718, which isn't unreasonable due to the NBN and AT&T contracts ramping up,
- Assuming that the majority of "growth" infrastructure investments needed to deliver on contracts were paid last FY it could be assumed that net profit margin will get back in the black this FY and land somewhere between 2016 (2.4%) and 2015 (3.3%) numbers - lets say 3%
- this would give Netcomm net profit of ~$3.75m
- giving Earnings Per Share of ~$0.0256 and a PE ratio of 43.31 at the current SP of $1.11

I'm certainly no pro, but do Netcomm's growth forecasts justify this PE ratio? And hoping for a $2 SP, this would mean a PE ratio of 78!

would love to hear your thoughts.