Don't despair one could be coming your way with VMT at 14 c.
Opportunities in Software
Software development is a lot like Mineral Exploration for every success story there are reportedly 500 dismal failures in that space so picking winners is like finding the proverbial needle.
For the successful ones Software has a unique cost structure as you say. Unlike manufactured products where the R and D cost is just the beginning of the cost incurred to get a saleable product. Rand D is all there is to it, in the cost of software.
They don't even have the cost of burning and posting a cd anymore. Just save it to the cloud and sell a download pin which is delivered via the magical internet. No manufacturing, warehouse storage, or shipping costs. No Showrooms and wasting time with tire kickers.
Software as a service is a real winner.
How could VMT win us a gold medal.
The company is funded to increase manufacturing capacity to 300k units. The conversion to electric in the quest to reduce CO2 emissions means the market will be big enough to achieve 300k sales PA in a very short time.
If margins are maintained that would likely deliver a NPAT in the order of $150m.
A share price of $14 would put the market cap at $5.5b which would require a PE ratio of 36.
As you know VMT was trading at a PER of 60 back in sept 2020.
Teslas PE is 55 today. It was trading at a PER of 1,000+ when people were piling into the stock market in the risk on period in the covid lockdowns. .
If that happened we could be looking at , drum roll....... 3,000 X
The market makers were working over time when Tesla was loosing money in the early years giving it a MC at 600x it's losses in March 2020
Just goes to show that
The market is crazy
VMT Price at posting:
13.5¢ Sentiment: None Disclosure: Not Held
