Yes that's true but a favorite "bait" by stock newsletter promoters is to pick a sector with a very large market and pick a (small) stock with a great idea to capture a slice of the market (or even which expands it).
The story goes like "... if X could get just 1% it has revenue of $$$ ..."
Not saying you're suggesting this, but a much better way to look at the issue is to get an idea of the Total Addressable Market (TAM), and if Ed and mgmt team ever do an open investor roadshow that would one of the 1st questions I'd ask.
$8T contains revenue for so many things Yojee doesn't address.
Even if you looked just at the market for logistics software that will include so many things (e.g. warehouse management software) Yojee doesn't address.
Even if you had the number, the issue is in areas such as Procurement (stated target of Yojee) what is the plan to attack that segment given the dominance of ORCL & SAP in all things ETP.
What I'd like to hear is the product roadmap and business plan that takes YOJ to $1B of sales revenue and is that done by capturing 10% of TAM of $10B, 1% of TAM of $100B and how does YOJ get the capital to expand (and obviously how quickly can it be done). That's Vision! Some previous visionaries
Here's an interesting graphic
View attachment 933247
One has to be careful though ... Apple was lauched Jan 1977 and reached $1B is sales Dec 1982 (so I make that 6 full years). I worked at a software company (not on the list as it was eventually acquired by ORCL which was founded 1995 and reached $1B in sales in 2001 ... so 6 years) which claimed fasted to $1B is sales. Also not on the list is NVIDIA, fastest semiconductor company to reach $1B is sales (7 years) .
Gives an idea of how long we'll need to hold for a $1B is sales for a software company.
What annualized growth rate do you need to reach $1B in sales say in 8 years from now if we start from TTM Revenue of $500,000 ..... ANSWER is ~197% annualized growth rate Year on Year for 8 years. Might be a little difficult to achieve.
Some things work in our favour (subscription model generally provides a more predictable revenue stream) and some don't (while perpetual license sales made for possible "lumpy sales" it did provide sales incentives around Qtrly targets). As with all software companies, by design it lends itself to upselling, cross selling and upgrade cycles ... all intended to grow revenue and make the software "sticky" (hard to remove and replace with something else).
Looking at it from a Qtrly target growth POV.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 1 |
Year 1 Q4 |
$ 500,000 |
CAQR= |
50% |
| 2 |
Year 2 Q1 |
$ 750,000 |
|
|
| 3 |
Year 2 Q2 |
$ 1,125,000 |
|
|
| 4 |
Year 2 Q3 |
$ 1,687,500 |
|
|
| 5 |
Year 2 Q4 |
$ 2,531,250 |
Y2 AR |
$ 6,093,750 |
| 6 |
Year 3 Q1 |
$ 3,543,750 |
CAQR= |
40% |
| 7 |
Year 3 Q2 |
$ 4,961,250 |
|
|
| 8 |
Year 3 Q3 |
$ 6,945,750 |
|
|
| 9 |
Year 3 Q4 |
$ 9,724,050 |
|
$ 25,174,800 |
| 10 |
Year 4 Q1 |
$ 12,738,506 |
CAQR= |
31% |
| 11 |
Year 4 Q2 |
$ 16,687,442 |
|
|
| 12 |
Year 4 Q3 |
$ 21,860,549 |
|
|
| 13 |
Year 4 Q4 |
$ 28,637,320 |
|
$ 79,923,817 |
| 14 |
Year 5 Q1 |
$ 35,223,903 |
CAQR= |
23% |
| 15 |
Year 5 Q2 |
$ 46,143,313 |
|
|
| 16 |
Year 5 Q3 |
$ 60,447,740 |
|
|
| 17 |
Year 5 Q4 |
$ 79,186,539 |
|
$ 221,001,496 |
| 18 |
Year 6 Q1 |
$ 91,856,386 |
CAQR= |
16% |
| 19 |
Year 6 Q2 |
$ 106,553,408 |
|
|
| 20 |
Year 6 Q3 |
$ 123,601,953 |
|
|
| 21 |
Year 6 Q4 |
$ 143,378,265 |
|
$ 465,390,011 |
| 22 |
Year 7 Q1 |
$ 157,716,092 |
CAQR= |
10% |
| 23 |
Year 7 Q2 |
$ 173,487,701 |
|
|
| 24 |
Year 7 Q3 |
$ 190,836,471 |
|
|
| 25 |
Year 7 Q4 |
$ 209,920,118 |
|
$ 731,960,381 |
| 26 |
Year 8 Q1 |
$ 230,912,130 |
CAQR= |
10% |
| 27 |
Year 8 Q2 |
$ 254,003,343 |
|
|
| 28 |
Year 8 Q3 |
$ 279,403,677 |
|
|
| 29 |
Year 8 Q4 |
$ 307,344,045 |
|
$ 1,071,663,194 |
One thing I am certain of though ... ORCL wont let YOJ hang around for 8 years and take that revenue. If YOJ demonstrates that kind of growth (and product success), sometime in Y5 that get bought.
Then the question is how much?
Average of ~5x FTM revenue for SaaS ... so $1.1B
Fun exercise though
(20min delay)