If a deal should come to pass, I wonder what kind of revenue model PCK would apply. If say by bed/year, then surely for a whole year, it would be at least like $10/bed/year. After all, the aged care is charged around $50/bed/year. And according to PD in the video, between 25% and 40% of the beds are occupied by dementia patients.
So here goes, assuming:
a. $10/bed/year
b. 25% of 27m beds = 6.75m. Let's say 7m for easy calculation.
c. Revenue = 10 x 7m = $70m/year.
And since cost is really next to nothing, lets just use that $70m as operating profit. Even if there is bigger cost, it would have been covered by income from the aged care sector already. At PE of 30 (very conservative for a growth stock), we get 30 x 70 = $2100m market cap. That roughly equates to $2/share based on the number of shares on issue.
So, very conservatively, just for PainChek, any deal with Philips will re-rate PCK immediate term, at least 50 cents but longer term $2. And I stress again, that is very conservative number and does not even include any PainFaces euphoria here. What's more, there is nothing to argue against PCK charging $50/bed same as what is charged against the aged care sector. Even if there is a volume discount, usually it won't be more than 50%. But let's say at 50% discount, we get $25/bed/year! If so, then one can multiply the market cap outcome above by 2.5 which gives market cap of $5250m! That's share price of around $5.
All these numbers based on just this one PainChek deal with Philips alone. Then along comes GE and Siemens and every other Dick, Tom and Harry. After all, perform or be liquidated. And here is where the beauty of being a monopoly comes in play. Anybody else wants digital pain management, who do you call? GC of course!
And she will put you in the right path to PD!
Happy investing, my PCK family and friends. And yes, that includes you noob
Disclaimer: PD did say it may all come to nought. If so, then please ignore this post
