SAS 0.00% 1.6¢ sky and space company ltd

share price predictions after 3 diamonds revenue and pearls funding, page-8

  1. 919 Posts.
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    It's hard to determine the share price based on speculation, before any revenue is coming in.
    I think that if there is a good announcement (around funding and/or 3D's revenue), then i could see the SP hit an all time high, probably over 28 cents.

    Now what could be the share price after 2020 when the 200 satellites are fully functional?
    You can actually calculate the share price of a company using this formula:

    Price per share = P/E Ratio x Earnings Per Share (EPS)
    where EPS = Revenue / Available Shares

    We just have to plug in some values:
    P/E Ratio - let's use the ASX average which is 15 (which is similar to the Telco sector average).

    To work out the EPS, we need to know what the revenue is.

    Now SAS expect revenues of $600m to $1B after 2020, however those figures are very conservative based on comments from SAS. Let's say we go with the upper limit (which i think is extremely realistic), less the costs of replacing 25% of the constellation per year (500K x 25 = $12.5m), then revenue is $987.5m, or lets just round down to $950m after other company expenses.
    We know that there are approx. 1.6 billion shares available (although could increase by 10% soon, but i will stick with 1.6 billion)

    Plug the values in:
    Potential SP = 15/($950m revenue/1.6b shares)
    = $8.90

    Now this is where it get's interesting, and it makes sense when Meir says "the sky is the lower limit".
    At the TechKnow event recently, Meir presented on the potential revenue of SAS from the countries across the equatorial region. He mentioned that our average mobile bill is around $80 per month. He gave an example of end users of SAS paying $10 per month. If SAS capture just 1% of the 3 billion population, this equates to revenues of 3.6 billion per year (30 million users x $120 per year). And that is just 1%, assuming we could charge $10 per month of course.

    If you plug those values in, I calculate a potential SP price of $33.75.
    Let's change some variables:
    Let's say $5 per month instead of $10 per month = $16.87
    What about capturing 5% of the population instead of 1% = $168.75

    These are just potentials - I am not guaranteeing anything, but just food for thought.
 
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