Verus International Inc (VRUS)

[asymmReturns]

My argument...

"Your argument would suggest that trailing revenues are all that matters in valuation"

Totally disagree. What my argument actually suggests is that taking a normal reasonable projections approach for this company is a composition error because the level of uncertainty around a company such as Verus is considerably greater than companies with even, say, 8 quarters of consistent growth and performance. That approach in time with a couple of execution notches on their belt? Sure. But the uncertainty around this early-stage company is so great that it is unclear that even with the trade financing around this potential revenue, that it will all be captured as value in the company. The assumption in that model was that it will all be achieved. Hopefully so, but there has been enough doubt and missed timelines I'm suggesting that the market will not begin to price in forward revs until confidence in management's promises is developed a bit.

And since the results in the most recent 10Q are for the period ending July 31st, we literally have no idea what revenues for nearly 6 month's worth of (hopefully growth) actually are. Which is why I made that original comment. It's a wet finger in the wind.

I'm comfortable with uncertainty. I'm uncomfortable assuming that any team nailed execution 100% under the circumstances Verus faces.