Pennexx Foods Inc (PNNX)

[Wellwhatdoyaknow]

80+% Net Profit Margin.

Since the PNNX operations is basically automated, I believe there is very low factory overhead with very minimal Expenses of which could easily see an 80% Net Profit Margin to derive an Earnings Per Share (EPS). However, instead, I’m going to presume an overly conservative 10% Net Profit Margin as a worst case scenario which might be too extreme for some.

$769,230,000 x .10 Net Profit Margin = $76,923,000 Net Income

$76,923,000 Net Income ÷ 46,057,322 Outstanding Shares (OS) = $1.67 EPS

Now we must further multiply the EPS by a PE Ratio.

The Software (Internet) Industry has 90.14 for its PE Ratio and 66.75 for those that would rather use its Trailing PE Ratio as can be confirmed from the link below out of taking such data from the Top 30 Companies within the Software (Internet) Industry:
pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html

The Software (System & Application) Industry has 144.40 for its PE Ratio and 110.90 for those that would rather use its Trailing PE Ratio as can be confirmed from the link below out of taking such data from the Top 363 Companies within the Software (System & Application) Industry:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html

I think it is important to understand the logic behind the Price to Earnings (PE) Ratio. The links below should help to better understand the PE Ratio logic as being the ”growth rate” to help assess the fundamental valuation of a stock:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170
http://www.investopedia.com/terms/p/price-earningsratio.asp

When analysts talk about the PE Ratio, they commonly refer to the Trailing PE Ratio which is why such is what I will use for the purpose of deriving this valuation and plus it’s smaller and more conservative compared to the current PE Ratios:
https://www.investopedia.com/ask/answers/050115/what-difference-between-forward-pe-and-trailing-pe.asp

So, to continue…

With taking the Trailing PE Ratio from the Software (Internet) Industry of 66.75, consider below for a PNNX valuation…

$1.67 EPS x 66.75 Trailing PE Ratio = $111.47 per share


With taking the Trailing PE Ratio from the Software (System & Application) Industry of 110.90, consider below for a PNNX valuation…

$1.67 EPS x 110.90 Trailing PE Ratio = $185.20 per share

Ok. Wait. I’m very much aware that those numbers are kind of crazy to some people for a valuation for some stocks. Let’s consider using a very conservative PE Ratio of 20 for its Industry which is much lower than the Industry norms. As you can see, based on the links that I have provided above, one could easily see that 20 is an ultra-conservative PE Ratio, but let’s calculate a stock price valuation from such nonetheless…

$1.67 EPS x 20 PE Ratio = $33.40 per share

Let’s say I’m off in one of my variables above by a factor of 10 so that instead of PNNX getting 1,000,000 users, they only get 100,000 users. Then you must use the Substitution Property to recalculate the formulas above of which from quick math, slide those decimals in those per share amounts to the left one placement representing one tenth (1/10) of the earlier share price examples.

Example:
$111.47 per share = $11.14 per share
$185.20 per share = $18.52 per share
$33.40 per share = $3.34 per share

Encourage everyone to read and understand what this means:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=153625046