Differing view on valuation
Wood, let's be honest, there are no professionals of repute trading this stock right now given it's on OTC. It's retail and algos and the latter doesn't care much about valuation. Algo models are primarily driven by technical and momentum factors. The former has an extremely short attention span and oftentimes has trouble deciphering the importance of news.
We're in the summer lull right now and given the market backdrop, it takes extraordinary news (like pre-announcing earnings results) to move the stock in my opinion. Most retail traders can't appreciate the importance of the credit line (though a smaller starting point than I would have hoped, but good news nonetheless).
Anshu had a slide in a prior deck that highlighted comparable valuations. He should have put in a similar slide in the last deck to show how undervalued the stock is relative to its growth rate and margin profile. Perhaps he was waiting for the credit line to be finalized, so maybe we'll get an update after Q3 numbers are released and he has a better handle on the BLF ramp.
In my view, we should exit the year at a $25-30mm revenue run-rate depending on how fast they can turn inventory. That should mean at least $60-$70mm in revenue in FY 2020 (excluding additional M&A and financing obviously). The question then becomes what multiple you put on this company given very rapid growth and net margins over 12%. Certainly argues for revenue multiple over 3x in my view and perhaps a lot higher.
