FNHI/ Worksport future valuation and Tonneau market
The Tonneau market is currently occupied by several competitors , the biggest being Truck Hero, a holding company for numerous brands of manufacturers. We will discuss Truck Hero Revenues below. My sources tell me the truck accessory market is estimate to be over 12B (Both OEM and aftermarket). Because many of these manufacturers are privately held companies, their revenues may be difficult to come by. Luckily we caught a glimpse of a small part of the market during Truck Hero's attempted IPO. The 2014-2015 fiscal year showed Truck Hero pull in north of 400M in Revenues. It is only natural to believe this figure is much higher now.
In 2016, approx 2.2M new light pick up trucks were sold. Ford consisted approx 30-35% of these sales, followed by Chevy second, and Dodge at third place. Assuming each new truck sold is a potential customer, and each customer picks a low-moderately priced Tonneau cover ($200-$400) - the annual potential here is approx 440M to 880M dollars. If we include higher priced tonneau covers, it becomes easy to see how the new truck market is a 1B + space. This is the potential for bed covers alone, and does not include other related accessories (Rugs, tool boxes, bumpers, liners, ETC., a market worth many billions more)
If the new pick up market is a Billion + market for tonneau covers, we can safely assume that the used pick up market( the aftermarket) is a conservative double to triple amount of the new pick up space. Thus we arrive to a Tonneau cover market of 3-4 Billion dollars. Again, this is not including other accessories.
What does this all mean for the future of FNHI/ Worksport ?
Mr. Steven Rossi, CEO of FNHI and the future WORKSPORT line has previously stated short term goal of 5M annually, and long term goal of 50M + . The company, currently selling under Truxmart has an innovative line of Tonneau covers - both hard and soft. Recently the company has introduced the Alpha and the Alpha Helios covers, the latter embedded with solar panels to produce over 400 Watts.
We have estimated the Tonneau market to be approx 3-4 Billion dollars annually, if FNHI can capture 1% of this market, revenues would be 30-40 Million dollars. This shows how conservative Mr. Steven Rossi's revenue goals are. It is also not a IF but a WHEN that FNHI/WorkSport begins to sell other truck accessories - increasing revenues significantly.
With the share structure changing soon to reflect the planned retirement of the majority of the CEO's shares, and based on management's conservative revenue goals, we believe the price per share valuation to be as such:
.25-.50/share if company can show gradual increase towards 5M annually. $1+ /share if company can show growth towards 25M annually, and multiple dollars if long term goal is realized.
Disclosure: The author of this article has not been compensated for this opinion piece. The author currently owns shares of FNHI, and reserves the right to purchase, sell, hold and/or otherwise at anytime. This article is strictly an opinion, and we suggest you do your own due diligence. The author is not a financial adviser. Always seek the advice of a financial adviser when making financial decisions. This article is not a solicitation, but for informational purposes only.
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