Potential SP Valuation of AT1 - 80 cents to 1.30/share

Starting a new thread to specifically discuss the potential SP value of AT1. Please try and stick to FA not technical.

Before I start, would like to draw attention to two interviews. Anyone interested in this stock, it is worthwhile listening to Eureka Report March interview of the CEO and ****** interview after the listing. There are other research materials available on the company website.

Links below:

Eureka report: https://omny.fm/shows/ceo-interviews/john-kelly-atomo-diagnostics

****** interview: https://atomodiagnostics.com/founder-and-ceo-john-kelly-interviewed-by-david-koch-of-******/

Key take outs are:

1. MOUs and LOI signed with at least 2 potential customers. With discussions with two others. This was in March and fair to expect a market announcement soon

2. Capacity - current capacity is 3mn units and will increase to 6m by Aug and 10m by Dec 2020.

3. Depending on product mix of B2B and B2C, potential revenue range if $20 m to $50m. This is a wide range and shows the scale possibilities.

4. Awaiting TGA approval for COVID 19 test - this will be huge when happens. CEO seems confident

5. This is a low cost lean operating model - means as they ramp up sales and production, cash generation will be exponential

6. NG Biotech is already using the AT1 antibody test on COVID patients. They have the right to buy upto 2.4m units in CY20. Currently selling in France and UK.

7. Gross margins 40% to 50% - higher for B2C.

8. Operating costs around $5m mark - based on FY19.


Hard to put a value on a growth company with such huge potential. They are a unique biotech with patented tech for rapid testing. So any valuation will attract a premium. Also heavy hitters supporting is a positive.

With potential revenue range of $20 to $50m in next FY, I think EBIT estimate of $5m to $15m (very high level).

I am not a big fan of using PE valuations for growth companies - revenue multiple is a better indicator of the share price in my view. Until these companies form a good sustainable operating model, revenue is a better indicator IMHO.

Bio techs valuations vary - depending on product and markets. For example NAN reported half year rev of $48.5m and PBT of $6.7m. NAN MC is $1.9bn has a PE ratio of > 150 x. If they make $100m revenue, current MC is close to 20x revenue.

Based on FY20 revenue range of $20 m to $50m AT1 valuation range is 80 cts to $1.30 /share = MC range of $448m to $730m. Revenue multiples range of 22x and 15x.

SP will not get there overnight but I think potential to double the share price from current 40 cents within the next few months is a possibility.

What are your thoughts?