Valuation
(been asked a few times in the last couple days)
Currently one would read if they just pulled up WAVX stats today, (revs ttm)
ShPr=$2.42, ShOut=83m, MCAP=214, Sales=$32m, PS=6.69, QyoQ SalesGrowth 42%
Looking forward:
Guidance: Wave indicated confidence on making $45-50m ‘or more’ FY2012. Using 50m and having it be Q3'2011-Q3'2012 then:
Scenario 1a:
ShPr(calc)=$3.79, ShOut=88m(Safend), MCAP(calc)=$334m, Sales(est)=$50m, PS(assigned)=6.69, QyoQ SalesGrowth 56%.
If one increases PS to accommodate the increase if QyoQ sales growth in a 1:1 fashion then:
Scenario 1b:
ShPr(calc)=$5.06, ShOut=88m(Safend), MCAP(calc)=$446m, Sales(est)=$50m, PS(assigned)=8.92, QyoQ SalesGrowth 56%.
I have a rev model that books $62m in 2012 that I consider to be a likely scenario, the ttm postQ3 in that model is $55m. Using that:
Scenario 2a:
ShPr(calc)=$4.18, ShOut=88m(Safend), MCAP(calc)=$368m, Sales(est)=$55m, PS(assigned)=6.69, QyoQ SalesGrowth 71%
If one pulls the same stunt to accommodate change in growth rate in a 1:1 fashion then
Scenario 2b:
ShPr(calc)=$7.19, ShOut=88m(Safend), MCAP(calc)=$632m, Sales(est)=$55m, PS(assigned)=11.5, QyoQ SalesGrowth 71%
Finally if one uses my above rev model and has DoD flip the switch on 1m seats at $50 per seat to recognize over 4Qs beginning Q3 (add $12.5m) then … revs $68m
Scenario 3a:
ShPr(calc)=$5.16, ShOut=88m(Safend), MCAP(calc)=$455m, Sales(est)=$68m, PS(assigned)=6.69, QyoQ SalesGrowth 112%
Modify PS according to QyoQ growth rates as above (PS=17.8) then:
Scenario 3b:
ShPr(calc)=$13.78, ShOut=88m(Safend), MCAP(calc)=$1.21bn, Sales(est)=$68m, PS(assigned)=17.8, QyoQ SalesGrowth 112%
Summary using PS as the SP determinant
Scenario 1a: (SKS Q3 ttm sales $50m), current PS, SP=$3.79
Scenario 1b: as above modified PS(8.9) due to accelerated growth SP=$5.06
Scenario 2a: (DS Q3 ttm sales $55m), current PS, SP=$4.18
Scenario 1b: as above modified PS(11.5) due to accelerated growth SP=$7.19
Scenario 3a: DS+bigDoD end of Q2 booking Q3 and on, current PS, SP=$5.16
Scenario 3b: as above modified PS(17.8) due to accelerated growth, SP=$13.78
i.e. One year from now:
SKS> $3.79-5.06
DS> $4.18-7.19
Koolaid> $5.16-13.78
The above content is my opinion.
AI
