Vapor Group Inc (VPOR)

[Deewar25]

love a discussion as to why there is such a hype to $1+ like they know its undervalued and has to be much higher. The main arguments I see is 'well, look at it compared to the rest', and 'look at the profit of 1.1m'.

These are both useless arguments. 1, the rest are way overvalued, 95% of all pot stocks are way overvalued, 2, 1.1m is gross profit and is not profit you use to value a company (if you truly feel the need to try to value an otc). You look at net profit, end of story, that is how you get your PE ratio.

A very generous high growth PE is 50. True profit last year was 161k which means its current earnings on current company structure was 0.00048 or PE of 244...it's overvalued by 400% right NOW.

More realistic in penny world, you look at revenue - they have 2m in rev - a very aggressive valuation could be 20x sales, or a 40m cap - well, thats right where it is now - fair value. A realistic analyst, would give it 5x sales or 10m cap - thats about 0.03c. That would be a fair assessment of true value.

Looking at growth though, lets just say they ramp up and do $10m NET income in 2 years (I'm being way generous), well, by then, the outstanding share count would be a minimum of 1.08 billion once the preferred convert in 18months (bet its way higher though). That is an EPS of 0.009. By then, they would be slowing growth because of size - a 20PE is sector average currently in the real world - that would be an 0.18c valuation.

So to say its undervalued is silly - to place a valuation based on fundamentals is silly (its an otc, they are chart plays only), but if you are going to smack a value on it, at least use fair calculations! Just saying.