Updated Valuations 5/15/09
DDRX still undervalued when compared to peers:
Share Prices:
CBOU $5.50
GMCR $77.82
PEET $26.00
SBUX $12.94
DDRX $12.91
Shares Outstanding:
CBOU 19.4 million
GMCR 24.7 million
PEET 12.9 million
SBUX 734.6 million
DDRX 5.5 million
Market Caps:
CBOU $107 million
GMCR $1.9 billion
PEET $335 million
SBUX $9.6 billion
DDRX $71 million
Most Recent Quarter Revenue Growth (YOY):
CBOU lower than prior year quarter
GMCR 56.3%
PEET 12.5%
SBUX lower than prior year quarter
DDRX 72.3%
Forward Earnings:
CBOU $0.35
GMCR $2.13
PEET $1.14
SBUX $0.85
DDRX $1.50 (my estimate, see below)
Forward PE Ratio:
CBOU 16
GMCR 37
PEET 23
SBUX 15
DDRX 9
DDRX PPS at competitors forward PE:
CBOU $23
GMCR $53
PEET $33
SBUX $22
In conclusion, to value DDRX going forward, it should trade somewhere between $22 to $53 when compared to it's competition.
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My calculations for the $1.50 Fiscal 2009 earnings:
To earn $1.50 they need to make about $8.25 million. If I add on, say $8 million for Corporate expenses, the Wholesale Operation will need to produce $16.25 million in net income.
Wholesale net income margin was 17.5% of revenue last quarter. If they keep it at 17.5% (I think they will improve on that number with continued cost savings) in Fiscal 2009, they will have to do $93 million in revenue from July 2009 through June 2010 to hit the $16.25 million net income number.
I am guessing Wholesale revenue for Fiscal 2008 to finish up in the $70-$75 million range. $93 million would be in the bag imo then for Fiscal 2009. I think it could top $30 million a quarter by then, or $120 million now with sales at Walmart's.
$1.50 EPS x a modest 15 PE = $23 PPS
Earnings and revenues growing this fast it actually deserves a higher PE than 15 imo...
