Below are some thoughts to consider to ”Compare & Contrast” that justifies why THNS is a better investment than CTXS in my opinion. With CTXS the Laws of Diminishing Returns has set in to where the growth of CTXS has been tremendously slowed down considering that it is trading at over $71.00+ per share compared to how low THNS currently trades well below a penny. The market for CTXS is oversaturated for obtaining any significant return on your money or growth. Just consider the magnitude of trading that would be required to get CTXS to trade at a double, or triple, or especially any amount of times much higher given where it’s trading now. In my opinion, we investors here have missed out on sharing on the significant growth in CTXS, but looks at THNS and look at the variables below to see why investors would do better to take the risk in THNS versus CTXS. We here in THNS don’t have those problems.
I made the decision to consider CTXS to ”Compare & Contrast” against THNS because of the link below showing that I am not the only one who believes that THNS is a better investment than CTXS. The link below shows that EZTraker™, a customer since 2003, has again selected THNS over CTXS: http://finance.yahoo.com/news/loyal-customer-eztraker-selects-thinspace-113000063.html
I will reflect three valuation thoughts to considered after you first review the ”key variables” below to ”Compare & Contrast” to get an idea of how undervalued THNS is in comparison (the Market Capital Analysis Valuation and two Fundamental Valuations). Simply use the Substitution Property accordingly as any of these ”key variables” that were used might change at any given time in the future.
THNS Price to Earning (P/E) Ratio = 56.20 (Application Software Industry) CTXS Price to Earning (P/E) Ratio = 20.40 (Business Software & Services) http://biz.yahoo.com/p/821conameu.html http://biz.yahoo.com/p/826conameu.html (Both companies trade within the Technology Sector, but within different Industries.)
Market Capital (MC) = OS x Share Price THNS MC = 104,488,675 shares x .0066 Share Price = $689,625 CTXS MC = 160,287,615 shares x $71.61 Share Price = $11,478,196,110
I’ll let you ”Compare & Contrast” the difference in Market Caps to see just how undervalued THNS is just based on comparing the Market Cap Analysis of both companies.
My main reason for using this comparison was to show that regardless, THNS is greatly undervalued for the reasons earlier above I stated to ”Compare & Contrast” the companies against each other. How much undervalued? I’m not sure, but I think we all here should be able to agree that THNS is greatly undervalued here at these price levels based on the few variables above. Maybe it shouldn’t be trading at the $71.00+ per share levels like CTXS, but I think we all can agree that it definitely should not be trading down here at these levels under a penny.
Let’s consider a couple more logical valuations where we can come up with a roundabout share price through logical deduction.
Fundamental Valuation:
Reade below to understand why I am going to ”speculate” that THNS (Thinspace) could very well generate roughly in the area of $26,008,050 in Revenues for the year of 2015:
What I did was ”speculate” that THNS will continue its norm of having a year-over-year improvement of 315% which equates to generating $26,008,050 in Revenues from what they generated in 2014. If you believe that the amount is not logical in your opinion, then simply use the Substitution Property to create a scenario that makes more sense to you. Consider below with THNS generating somewhere in the area of $26,008,050 in Revenues for the year of 2015 to derive an Earnings Per Share (EPS).
The Outstanding Shares (OS) is the key fundamental denominator that is used to assess the fundamental valuation of a company to help derive the Earnings Per Share (EPS) for a company. To derive an EPS, we must derive a Net Income amount. To speculate as explained above, consider $26,008,050 in Revenues for the year of 2015. From the link below, THNS trades within the Application Software Industry within the Technology Sector. As you can see, the Net Profit Margin is 12% for stocks that trade within the Application Software Industry: http://biz.yahoo.com/p/821conameu.html
This means that the Net Income would be calculated to be as such:
$26,008,050 in Revenues x .12 Net Profit Margin = $3,120,966 Net Income
Now we derive a potential EPS from the info that we have available to consider. To do this, we must divide the Net Profit/Income by the OS to get the EPS as derived from the formula below:
Net Income ÷ Outstanding Shares (OS) = Earnings Per Share (EPS)
So…
$3,120,966 Net Income ÷ 104,488,675 shares = .0298 EPS
To determine where a stock should fundamentally trade, multiply the EPS with the Price to Earnings (P/E) Ratio. For inquiring minds, the P/E Ratio is basically the ”Growth Rate” for a group of similar stocks within a particular Sector or Industry for where a stock would be classified to exist/trade. As that stock exists within that particular Sector or Industry, it is expected to grow at the same rate as such like stocks within that Sector or Industry. For those new for understanding what a P/E Ratio is, read the links below that hopefully will help: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170 http://www.investopedia.com/terms/p/price-earningsratio.asp
From the link below, it is indicated that 56.20 is the P/E Ratio for stocks trading like THNS within the Application Software Industry: http://biz.yahoo.com/p/821conameu.html
Consider the formula below…
EPS x P/E Ratio = Fundamental Share Price
So…
.0298 EPS x 56.20 P/E Ratio = $1.67 per share
This means that given all of the considered variables above, the Fundamental Share Price for which THNS should trade could be somewhere within the $1.67 per share price range if all of the stars align according to the above.
As for most or almost all stocks within the penny stock world, the stars usually don’t align for whatever has been positively speculated about a stock with such a huge magnitude. Please know that me posting these thoughts will not be the justification for any kind of significant price movement and price sustainment. Such will be justified by the ”substance” that THNS publicly releases to confirm its growth.
I must stress again, the primary purpose of this post is to help one to have a framework to consider using as a basis for formulating a valuation to consider. Please use the Substitution Property to substitute out any variable that might change later in the future such as the amount of Net Income or particularly the amount for the OS if it increases. Still, consider now if I am only half right… or a third right… or a quarter right… or even a tenth right… with my thoughts above.
Example: Substitute out the P/E Ratio for a more conservative P/E Ratio so that instead of using 56.20, just use 15 instead to get a roundabout share price of below:
.0298 EPS x 15 P/E Ratio = .447 per share
Regardless… THNS is significantly undervalued at these levels.
As a worst case scenario, let’s consider that THNS shows no growth and only generates the same amount of $6.267 million in Revenues for 2015. Then consider below to still see why THNS is greatly undervalued as a worst case scenario:
$6,267,000 in Revenues x .12 Net Profit Margin = $752,040 Net Income
So…
$752,040 Net Income ÷ 104,488,675 shares = .00719 EPS
So…
.00719 EPS x 56.20 P/E Ratio = .404 per share
This means that if for some reason THNS generates the same amount of revenues for 2015 that it did in 2014, then there is a chance that the above valuation could be justified as a worst case scenario. Although there is not a guarantee of such levels, but as you read the next section I organized, you will see that the company believes that such is very much achievable.
The question now is why would I or anyone believe that THNS will continue their growth of 315% improvement year-over-year in revenues? I think the first reason of justification is to evaluate the quality of J.Christopher Bautista who is the CEO of THNS and focus on the companies that are highlighted for his previous experiences especially Infosys that trades on the NYSE at $16.00+ per share which is currently a $36.87 Billion dollar company:
Mr. Bautista brings an extensive background in management consulting as well as technology expertise to Thinspace. Most recently, he served as a Principal at Infosys Limited, a leading technology company who pioneered the Global Delivery Model of technology solutions. Mr. Bautista started his career in technology and strategy working for management consulting firms Andersen Consulting (now Accenture) and Diamond Technology Partners (now PwC). He has provided consulting and advisory services to the senior executives of companies such as Microsoft, Adobe, Honda, Sears, BP, as well as various US government departments and agencies.
In addition to management consulting, Mr. Bautista has wide-ranging mobile and cloud technology experience having worked at Sprint, inCode Telecom, and Enterprise Mobile. As Thinspace Technology becomes more involved in the mobile device ecosystem, his experience in the mobile enterprise will shape the strategic direction for the company’s mobile and cloud strategy.
Mr. Bautista also joins Thinspace with significant international business development and strategy planning for technology companies. Previously at VeriSign, he was responsible for international business development, identifying strategic business partners and business models in global markets outside the US. Mr. Bautista also ran and operated a strategic sourcing company for small electronics and other products sourced from Asia.
Mr. Bautista holds a Bachelor of Science from Miami University and an MBA with honors from Southern Methodist University. He resides in Dallas, TX with his wife and three children.
The videos below reflects what THNS brings to the table with their operations:
The first video above stated that THNS was significantly undervalued back when it was trading at .20 per share. I think I’ll let each individual decide if THNS is undervalued or not.
In summary, there are three valuations to consider above that a justify a ”potential” valuation for where THNS could logically exist to trade. The bottom line here is that no matter how you slice the pie, THNS is significantly undervalued.
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