Avid Bioservices Inc (CDMO)

[realist1]

RE "we expect to recognize $10-15M over the remainder of FY18."
There's 2 quarters left in FY18.
That's ~$6.25 million per Q.
That's horrible!
That's an annual run rate of $25 million.
That gets them huge losses.
I've heard a well run, high margin CDMO can fetch a ~5 X sales market cap.
BUT Avid is NOT high margin, it has NEGATIVE margins and never earned one penny in profit.
To say it is UNPROVEN and WILL (YES WILL) trade at a discount is a given.
3 times sales is generous.
3 * 25 = 75 million market cap. divide by share count (unknown due to future needed financing) = ? stock price of $2 orless is certainly reachable.
And remember, my projections have always been overly optimistic!
Add in value of IP (= zero) and you're still at ~$2.
The market must really really like the new team to give it such a premium to fair value!
These guys better start PR'ing big new contracts or the romance will wear off quickly!