While I appreciate this level of thought and analysis, I have a couple of problems with it:
1). A 15x PE multiple is very low not only for the entire stock market (20x or so) but esp. for a growth company...is Tesla and others trading on 15 PE multiples? Look at MJNA stock, $6m revenue for most recent quarter, same industry as POTN, not profitable and valued at over $200m (yet POTN $5m rev for most recent quarter and profitable but worth $30m)
2). I believe a company in this stage should be measured off of a multiple of Sales...current annualized POTN sales based on most recent quarter would be $20M, but its trading at a value of $30M (.06 x 500m shares rounded) so about 1.5x sales...its competitors range from 4-20x sales
3). 10% profit margin doesn't factor in economies of scale...yes that may be the current margin, but that's because fixed costs are being spread over a small base...as the company grows, and certain costs stay fixed, the profit margin will grow (your analysis assumes all costs are variable which is not correct)
4). I agree about the note in the financials about potential dilution up to 1 billion shares...effectively this means the shares could double and the price per share could cut in half. I (and I think others) believe this has already been priced into the stock...we feel this stock should be at least 20-25 cents now based on current shares outstanding, so cut that in half and its still 12 cents...if you bought for 6 cents and believe fair value NOW is 12 cents fully diluted, it still makes this one of the safest bets in penny land.
