Momentum Players

[jaybird249]

NEXT EFUT GOAM 2 MM float $1 EPS in 2007
GOAM:NASDAQ ($4.05) is a 2.3 MM float telecommunications stock that reported 250% SALES GROWTH and PROFIT from continuing operations of $49,000 in last quarter (Yahoo financials).

GOAM IS ON PACE TO EARN OVER $1 PER SHARE IN 2007.

With GOAM's fixed cost structure and tiny 2.2 MM share count, the earnings leverage to increasing sales is HUGE. Assuming historical 40% margins and conservative 2007 30% growth rate (compared to 200% in 2006) GOAM should easily earn $1 PER SHARE IN 2007 (see analysis below).

A 30% revenue growth forecast is VERY conservative- GOAM still only has a fraction of the potential reveue in a HUGE market- 40 MILLION AMERICANS ARE HEARING IMPAIRED.

Assuming GOAM earns $1 per share in 2007, its fair value at 25 PE is $25 per share. Detailed projections:

ACTUAL Q3 2006

Revenue------------$4550
Cost of revenue----$2810
Gross Margin-------$1740
S G + A------------$1930
LOSS---------------$190
LOSS PER SHARE-----$.07

PROJECTED AVERAGE QUARTER 2007 ASSUMING 30% SALES GROWTH AND 40% MARGINS
Revenue------------$6000
Cost of revenue----$3600
Gross Margin-------$2400
S G + A------------$2000
PROFIT---------------$400
PROFIT PER SHARE-----$.18

ANNUALIZED PROFIT = $.72
FAIR VALUE AT 25 PE = $18

PROJECTED AVERAGE QUARTER 2007 ASSUMING 50% SALES GROWTH AND 40% MARGINS
Revenue------------$7000
Cost of revenue----$4200
Gross Margin-------$2800
S G + A------------$2000
PROFIT---------------$800
PROFIT PER SHARE-----$.35

ANNUALIZED PROFIT = $1.44
FAIR VALUE AT 25 PE = $36