This is just too good! I was going through some numbers, wondering just how easy it would be for ICNB to become a 25 cent stock...in the near term. What I found is that there are many ways to get there!
First of all, we're in a highly profitable business sector - 19% on average in the alcoholic beverage sector. Now I'll backtrack out from the stock price to see what kind of revenues we need and where they can come from.
First I'll take the desired stock price and divide a P/E ratio out of it.
$0.25 per share divided by a conservative P/E ratio of 20 = $0.0125 per share.
Now I'll just get the net income by multiplying by the number of outstanding shares.
$0.0125 per share * 816 million shares (approx.) = $10,200,000
Now that I have a net income amount, I'll can get the revenue required based on the profit margin. I'll be a little conservative and use a slightly lower profit margin of 18%, in part because our bottles probably cost a little bit more with the printed graphics.
$10,200,000 divided by 18% = $56,666,666 in revenue, that we need.
Now let's look at some sources of probable revenues.
First, I'll look at retail locations (liquor/grocery stores).
Management has mentioned recently that they are closing in on 1,000 retail locations. Based on that rate of store growth in just the past 4-6 months, I estimated forward that we could easily have 2,500 locations by the end of 2017, in just the United States! I got that number by looking at our current store locations, using those state's population as a percentage of the U.S. population.
Here are some numbers from a previous post, assuming we only reach 2,500 retail stores this year for starters. I'll use $9 per bottle as a wholesale price.
2,500 stores selling 3 bottles per day = $24.3 million in revenue.
2,500 stores selling 6 bottles per day = $48.6 million in revenue!
Now let's add restaurants. We're in negotiations with Buca Di Beppo, which has at least 90 restaurants.
Using a $9 wholesale price, times 300 days (6 days per week)....
90 restaurants selling 1 bottle per night = $243 thousand in revenue.
90 restaurants selling 4 bottles per night = $972 thousand in revenue.
So you might think that's not a lot of revenue compared to the tens of millions that retail locations can sell, but what if we land a deal with a very large restaurant chain that has perhaps 1000 locations.
1000 restaurants selling 1 bottle per night = $2.7 million in revenue.
1000 restaurants selling 4 bottles per night = $10.8 million in revenue.
Let's add some weddings to the mix. I posted the other day about an article that showed 6,200 weddings are held in the U.S.....every day, on average!
Since Bellissima is positioned as a festive prosecco, if we just tapped into 1 out of every 100 of those weddings, at 50 bottles per wedding, times 360 days (an average of 62 weddings per day), let's see what we get.
62 weddings celebrating with 50 bottles of Bellissima = $10.044 million
Those are just some of the possible markets. How much could we sell in bars and wine bars? How about casinos? Or anniversary events? Graduation parties? Special events like corporate Christmas parties?
What if we had 5,000 total stores in a year from now, in the U.S. and a couple of other countries? That would be a reasonable number of retail outlets, for starters.
5,000 stores selling 3 bottles per day = $48.6 million in revenue
5,000 stores selling 6 bottles per day = $97.2 million in revenue!
What if we have more products besides Bellissima? I haven't considered any Bivi Vodka revenues either. How many retail locations, bars, restaurants, weddings, anniversaries, graduation parties, and special events can we tap into worldwide in 2-3 years? What if we acquire some other brands!
If you start running the numbers like I have, using conservative estimates, it should become obvious that we can scale to a beverage company that does hundreds of millions in annual revenue. That's not unreasonable. Alcoholic beverage companies can do billions of dollars in annual sales!
For the short term, I see many paths to get the stock price to the 25 cents to 50 cents range, in the near future, since the market is forward looking. In a year or two, I see an easy path to multiple dollars!!
So break out your spreadsheet and start crunching the numbers. The more I crunched, the more obvious it became that we're sitting on a potential super gold mine! It's important that you do your own due diligence as you'll discover things along the way. Then you can make a much better decision about investing.
Just my opinion; not investment advice; please do your own due diligence.
