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Re: stervc post# 63289

Wednesday, 04/03/2019 1:07:31 PM

Wednesday, April 03, 2019 1:07:31 PM

Post# of 163971
I think it's best to be a bit more conservative in these valuations.

First, let's consider some of the numbers and ratios in question.

O/S = 600,000,000 shares
I think it's best to assume O/S is in the 500-600 million share range (as has been talked about here in recent weeks), so let's use the most conservative number within that range. For this valuation, I'm not going to include the effect of a share buyback on O/S, as there has been no indication that one has yet started.

PE ratio of the furniture industry = 16.77
I think it's best to use a forward-looking PE as VYST has not yet consolidated with Rotman's. Additionally, a PE ratio of 36.53 would suggest that Rotman's is considerably overvalued, especially given its purported growth rate of ~15% (per video with Steve Rotman). Realistically, the growth rate may be closer to ~10% given the industry PEG ratio of 1.58.
https://www.zacks.com/stocks/industry-rank/industry/furniture-79

Tax NOL
I'm also not going to include Tax NOL carry-forward, as we are not sure how this will affect PPS, based on the stipulations addressed in the prior 10K, filed on 2018-03-29 (see below).
https://www.sec.gov/Archives/edgar/data/1308027/000138713118001267/vyst-10k_123117.htm


That being said, please see below for valuations.

Gross Profit Valuation
O/S = 600,000,000 shares
PE ratio = 16.77

$35,000,000 revs x 0.48 gross profit margin = $16,800,000 gross income
$16,800,000 gross income ÷ 600,000,000 (O/S) = 0.028 EPS
0.028 EPS x 16.77 PE ratio = ~$0.47 per share Gross Valuation

Net Profit Valuation
O/S = 600,000,000 shares
PE ratio = 16.77

$35,000,000 revs x 0.19 net profit margin = $6,650,000 net income
$6,650,000 net income ÷ 600,000,000 (O/S) = 0.01108 EPS
0.01108 EPS x 16.77 PE ratio = ~$0.19 per share Net Valuation

Again, this is a more conservative approach, but something I think should be shared. I believe this valuation may also take into consideration the fact that VYST is currently operating at a net loss (we won't know for sure until new 10K is filed), which will have an overall impact on the combined balance sheet post-consolidation.

As an aside and, IMHO, I do believe we will see VYST trading in the $0.25-0.50c range in due time if everything checks out.

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