Vapor Group Inc (VPOR)

[Tony_the_Tiger_1973]

Discounted Cash Flow Analysis of VPOR
http://www.investopedia.com/university/dcf/dcf4.asp

I have been tracking this company for a while now, and am not in this for a quick flip. While it's a penny stock, The Vapor Group is a real company and I look at it as more of a venture capital investment at this point. The dilution will be over soon, and it is important to understand what the company is actually worth.

Revenue is increasing by roughly 20% per quarter, and costs are stabilizing, indicating the fact that profitability is within reach. Profitability indicates sustainability, and the CEO indicated for the time being that outside financing is no longer necessary.

Assuming they stay on the same revenue growth trajectory (which is conservative, given the explosive industry they operate within), I expect Q4 revenues to be 1.57 million dollars. It will be a coin toss as to whether they are in the black, but that is normal with a start-up venture. With a figure like this, I project total revenue in 2015 to be 10.1 million dollars with profitability at the bottom line.

Using a 12% discount rate, DCF Analysis suggests that this company is worth (10.1M / .12 ) = $84.2M. After conversion of promissory notes ends, I expect the market cap to adjust towards this figure.

I will revisit this analysis each quarter.

Educated comments and thoughts are welcome.