Alan,
I did the math in a post a few months ago for 6 customers, a total of 60 Inspect modules, at an 80% profit on revenue, no partner takes, and something somewhat lower than the company projection of $975K for the 2 units sold in December 2013. It came out to something like $3.45 per share. With the latest GE machine numbers and new partnerships, we can do it again.
DEBATABLE ASSUMPTIONS:
-They only get 75% of the expected $975K per pair of modules, =.75x975K = $731K per pair.
-Profit is only 80% of module sales price (I actually think that it will be greater than 100%).
-Partners take 40% of sales profit.
-shares outstanding is 650 million (I expect Rockville to buy the second round of funding shares).
-P/E multiple is 25 ( This is share price to earnings(profit)).
-one Inspect module only per printer machine.
-Honeywell and GE put into play 100 machines each.
-Pratt & Whitney, Rolls Royce, Lockheed Martin, Boeing, and Northrop Grumman each put into play 20 printers each. (I think that these were the players that I had before).
-Total Inspect modules sold = 300, which is 150 pairs of modules.
RESULTS:
150 pairs x $731K = $109,650,000.
80% profit = .8 x 109,650,000 = 87,720,000
SGLB 60% take of profits = .6 x 87,720,000 = 52,632,000
profit per share = 52,632,000/ 650,000,000 = .081
P/E of 25 yields a share price of $ 2.02
And this is for Inspect modules only.
As a time frame for all of this, I think that SGLB winning a full GE or Honeywell contract will precipitate the market to conclude that they will get all of the rest also. This will precipitate the full scale move into the stock. The big hitter players will miss the party otherwise. They are not in the business to miss parties.
If you throw in Deform, and the likelihood that the number of printers that will be coming on line is probably much more than 300, then it is easy to see SGLB well over $3.00 per share. I do not think that this will happen in Q3 or Q4 2014. I do think that it will happen in 2015 though.
All the best,
Silversmith
