Individual test nunbers forecast i mean?
I hope the sp doesnt get to ahead of itself before we know how sales are.
Printable View
Individual test nunbers forecast i mean?
I hope the sp doesnt get to ahead of itself before we know how sales are.
If you read back quite far in the thread, we were estimating sales numbers. It is likely the sales numbers in the coming report in November will be very low. Some users here feel 200-500 would be a good result, I felt it will be somewhere between 5-10k (in the US), but now I am more inclined to think around 2-3k given they only had their first sale... last week?
While people have piled into this, I think they assume it is because sales will flow through naturally. I don't entirely disagree, but people need to be very careful! The ability to make sales (which is what the past few announcements were) does not mean they have already made sales! There are many risks associated with sales in the US medical market, particularly political. In reality it is entirely possible that PEB gets torpedoed from somewhere before it can even make a dent in the market. I don't believe this will happen, but it is entirely possible.
What I don't like with this is the SP has essentially gone up almost 300% in a very short space of time, without any concrete sales data. That's not good and completely out of whack even with my optimistic valuations. Hence I see a pullback to around $1-$1.20 in the near future, possibly lower. Right now, I feel the story is a bit over hyped and the traders have control which is indicated through intra day prices (which are all over the place). The market cap is a bit ridiculous (442 million!) - this could be at the lower end of the NZX50 ahead of fine companies like ATM, Diligent, HNZ... all who respectfully have confirmed sales, lots of money from sales in the bank and half decent dividends! Considering PEB hasn't even confirmed significant sales that seems a bit weird. Sure, all the potential is there, but nothing is yet confirmed. As such, if it ends up taking as long as they have previously stated (5 years to get to $100 million revenue), a pull back is certainly in order. Remember that at $100 million US in sales, they are probably only making 50 million in profit... around 16c EPS after the rights issue... and all this in 4 1/2 years time! That would represent a fundamental valuation of around $2.25... Are we really pricing in sales amounts which will hopefully occur in 4 years time, right now? Considering all the risks along the way? Without any confirmed sales or growth rates?
Working backwards... at $1.58 we have fundamentally valued the company as making a $35 million profit (11c EPS @ 7% return), having about 5% US market share, when they have not even broken even and are, in fact, asking us for more money to make it happen.
It would have been much more logical and preferable for me, had the SP gone up a lot slower than it did. While it looks good on my account (lots of big green numbers and up blue arrows!), it doesn't bode well in terms of volatility. So I think if you are a long term holder, prepare for some of those nice numbers currently you see to be looking not quite as nice in a week or two!
Thinking about it - I don't think management of PEB thought that the announcements would see such a huge jump in the SP either. They knew the timing of their reporting and were maybe looking for the rights issue price to be a 20-30% discount to current shareprice to be attractive. I don't think they expected it to be at a 65% discount! Hence you can see what they envisioned the SP to be when it was announced, hence you can judge the amount to which they believe the announcements are worth.
While I don't want to see you all lose money, I do want people to be careful! 300% increase in any shareprice means unbound euphoria is reining, evidenced by many of the posts here. Act with CAUTION.
DISC: Hold PEB shares, have for a long time, will for a long time still!
Well said blobbes some good points to ponder , lots of hype round at the moment. Sure makes for one hell of a ride though, a lot of potential must be built into the sp currently.
Cowswithguns...i almost hope they dont as we would probably see 5$+ with that news.
I look at my portfolio and wonder why my other stocks arent up 90% in a couple of days, i can get used to this.
How can anyone hope to judge the future price when not one of us knew we'd be at the current price just a week or two ago.
The feed of info concerning new deals in the States makes this a volatile one for a while yet - IMHO
But just for the sake of argument (in months). I DARE anyone to disagree but if you do then give me good reasons...
3 = 3.50,
6 = 4 to 5
12 = 10
Finally ... my namesake area of expertise. Time to add psychic analysis (hereinafter PA) to the bag of tricks.....
One reason that bothers me is that ideas like this can be absorbed into the machinery of a large place well north of here, be modified or altered slightly and come out at their price with a "Made in China" sticker on the bottom. Wellington Drive Technologies were about to change the world with their revolutionary motor twelve or fourteen years ago and there are still followers who argue that it's about to happen. I have about $6,000 in this one since last monday but the day after I secure the extras through rights a 55cps I will drop them. I would like to be wrong but I think you will be able to buy these at $1.00 - $1.20 by around Christmas.
Hope they have their accounting systems in order;) unlike another company we all know that received the same anount of enthusiastic posts
Disc: Still have funds in both companies!
China would need the IP (biomarker essays etc) to copy this and even if they did come up with a similar test it would take years to get their proof of concept, CLIA registration etc in place.
PEB's competitive advantage is not just the PROVEN science behind the test, it's also their great set-up in Hersey, PA. Once they get comfort with all of the big insurers I don't think a replica test will have much chance of entering the market.. unless it is both of a higher efficacy and is also cheaper..