Price to Earnings and Price to Sales Ratios are calculated based on actual numbers, trailing twelve months.
PE, for example, is weighed against the industry average. A higher PE would indicate growth prospects. Investors would be willing to pay more for earnings if they think there are decent growth prospects.
As calculated previously, $0.25/share would indicate $8,000,000 in annual revenue (sales) based on 256MM shares outstanding. (not sure if the outstanding share number is accurate today, but this is for educational purposes, so it'll work)
Share price = $0.25
Sales = $8,000,000
Total Shares = 256,724,670
Revenue per share = $0.031 / share
Price to Sales = $0.25 / $0.031 = 8.06 (Industry average is about 8)
Now we have to justify the $8,000,000 in sales...
10,000 customers that average $800.
5,000 customers that average $1,600.
1,000 customers that average $8,000.
500 customers that average $16,000.
100 cusomers that average $80,000.
Which scenario is likeliest? If you go to the middle, 1,000 customers averaging $8,000 in annual ad buys, you can justify a $0.25 PPS. Can INMG handle 1,000 customers? That's a lot of customer service. How much are advertisers likely to spend each month on a new, unproven platform?
If any of those scenarios are doable, then $0.25/share is justifiable based on industry metrics.
$2,000,000 annual sales, or $500,000 per quarter, would calculate to $0.06/share. I really believe they have to build from where they are today to get to $2,000,000 in annual sales. They should eventually get to the $8,000,000 figure, but that will take time.
At some point in the near future we should get guidance from Tom on this, at which time we can tighten up the figures and our expectations.
Of course, we could speculate on the PPS doing some wild things, like shoot up to $2.00. [Just for giggles, a $2.00 PPS would require about $64,000,000 in annual revenue to be sustainable.]
I don't presonally trade in those fantasies. Anyone expecting this type of price action will not have read this far into my analysis, all that jibberish about ratios and numbers and stuff would have put them to sleep. INVESTORS will let the metrics guide their buying decisions, not penny fantasies of getting rich over night.
