Tuesday, June 23, 2020 8:50:42 AM
Below is the previously released news on May 05, 2020 by VYST of resuming production of its FDA Certified Rx3000® UV Light Air Purifiers for use in Healthcare Facilities:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=155487094
Before I get to explaining how this creates a fundamental valuation for VYST somewhere between .0775 to $2.32+ per share, I think there are some other facts that must be brought out to fully understand the validity of this operation.
Dr. Bryan Stone explained in the link above that the Rx3000 uses the same UVGI detailed in CDC reports in April 2020 tht stated that UVGI is one of the most promising methods for decontamination of filtering facepiece respirators (FFR) for Coronavirus (SARS CoV-2), the virus that causes COVID-19. Many more significant details are indicated within the link above of which I suggest all read in great detail before reading further within this post.
Important to note within the link above to help us here to derive a fundamental valuation for VYST and its operations of its FDA Certified Rx3000® UV Light Air Purifiers, I think we need to consider the amount that is currently in the manufacturing process per week and the max amount that was mentioned that the company is going to ramp up to considering everything being positive with their further testing measures that they have in place.
The coronavirus is here to stay for quite a while going well into next year and some. Still, there is no vaccine for it. So, the next best thing is to create an environment to where we can coexist with the virus. The FDA Certified Rx3000® UV Light Air Purifiers can allow us to potentially live in an environment to where the air filtered within a room will be decontaminated reducing the risk of catching the coronavirus within certain locations such as hospitals, hotels, cruise ships, stores, homes, healthcare facilities, military installations, etc., as I think you get the point for just how big this could be for VYST and us shareholders. The demand for this product will be ridiculously huge for everyone everywhere. It is a way of life as part of the new normalcy as I like to call it. Also, what about the next virus? There is a good chance that we will already be better prepared to sanitize the environments with these machines as we will now be able to filter out viruses with what VYST is bringing to the table. Their machines are what’s going to help mitigate risk of life.
Now let me explain how this creates a fundamental valuation for VYST somewhere between .0775 to $2.32+ per share.
Per the PR above released back on 05/07/2020 stated per the VYST CEO...
I'm guessing the increase in production will be somewhat incremental. This is why I am going to reflect the revenues from the 50 units per week and then reflect incremental increases in the units per week up to the 1,500 units per week that they plan to ramp up to.
Also, VYST acquired all of the equipment necessary to make the custom filters used in the Rx3000. These large multi-stage filters retail for approximately $800 and last up to 1 year. This is also another form of revenues that must be incorporated as for when their production numbers for units increase, so shall their revenues from the sale of their filters too.
In order to derive a valuation, there are some fundamental presumptions that must be considered such as a Net Profit Margin of 25% (.25) and a conservative Price to Earnings (PE) Ratio of 15. For those who are new to understanding what a P/E Ratio is and key dynamics as it is referred to being the growth rate for a stock as it exists within its particular Industry, read the links below that hopefully will help one to see how it's used to 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
Also, let's presume an incremental increase in production of units from 50 to 100 to 250 to 500 to 1,000 to 1,500 units. If any variable that I used to derive the valuation changes or is later publicly announced to be some number different, then simply use the Substitution Property to substitute out or replace that variable with the changed variable.
Consider below...
VYST .0775 Valuation from Producing 50 Units Per Week
50 units per week x 52 weeks = 2,600 units per year x $8,000 per unit = $20,800,000 Revenue from Units
50 units per week x 52 weeks = 2,600 units per year x $800 per filter = $2,080,000 Revenue from Filter
Total Revenue from 50 units and filters = $22,880,000 per year
$22,880,000 Revenues x .25 Net Profit Margin = $5,720,000 Net Income
$5,720,000 Net Income ÷ 1,105,732,080 shares (OS) = .00517 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.00517 EPS x 15 PE Ratio = .0775 VYST per share valuation
In my opinion, .0775 per share should be the new low because that is from only taking into consideration the 50 units per week that they are now producing. Keep in mind too that this is only from one of a few forms of generating revenues.
VYST .154 Valuation from Producing 100 Units Per Week
100 units per week x 52 weeks = 5,200 units per year x $8,000 per unit = $41,600,000 Revenue from Units
100 units per week x 52 weeks = 5,200 units per year x $800 per filter = $4,160,000 Revenue from Filter
Total Revenue from 100 units and filters = $45,760,000 per year
$45,760,000 Revenues x .25 Net Profit Margin = $11,440,000 Net Income
$11,440,000 Net Income ÷ 1,105,732,080 shares (OS) = .0103 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.0103 EPS x 15 PE Ratio = .154 VYST per share valuation
This .154 per share is where VYST should fundamentally trade as a low from only producing 100 units per week. Keep in mind too that this is only from one of a few forms of generating revenues.
VYST .387 Valuation from Producing 250 Units Per Week
250 units per week x 52 weeks = 13,000 units per year x $8,000 per unit = $104,000,000 Revenue from Units
250 units per week x 52 weeks = 13,000 units per year x $800 per filter = $10,400,000 Revenue from Filter
Total Revenue from 250 units and filters = $114,400,000 per year
$114,400,000 Revenues x .25 Net Profit Margin = $28,600,000 Net Income
$28,600,000 Net Income ÷ 1,105,732,080 shares (OS) = .0258 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.0258 EPS x 15 PE Ratio = .387 VYST per share valuation
This .387 per share is where VYST should fundamentally trade as a low from only producing 250 units per week. Keep in mind too that this is only from one of a few forms of generating revenues.
VYST .775 Valuation from Producing 500 Units Per Week
500 units per week x 52 weeks = 26,000 units per year x $8,000 per unit = $208,000,000 Revenue from Units
500 units per week x 52 weeks = 26,000 units per year x $800 per filter = $20,800,000 Revenue from Filter
Total Revenue from 500 units and filters = $228,800,000 per year
$228,800,000 Revenues x .25 Net Profit Margin = $57,200,000 Net Income
$57,200,000 Net Income ÷ 1,105,732,080 shares (OS) = .0517 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.0517 EPS x 15 PE Ratio = .775 VYST per share valuation
This .775 per share is where VYST should fundamentally trade as a low from only producing 500 units per week. Keep in mind too that this is only from one of a few forms of generating revenues.
VYST $1.55 Valuation from Producing 1,000 Units Per Week
1,000 units per week x 52 weeks = 52,000 units per year x $8,000 per unit = $416,000,000 Revenue from Units
1,000 units per week x 52 weeks = 52,000 units per year x $800 per filter = $41,600,000 Revenue from Filter
Total Revenue from 1,000 units and filters = $457,600,000 per year
$457,600,000 Revenues x .25 Net Profit Margin = $114,400,000 Net Income
$114,400,000 Net Income ÷ 1,105,732,080 shares (OS) = .1034 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.1034 EPS x 15 PE Ratio = $1.55 VYST per share valuation
This $1.55 per share is where VYST should fundamentally trade as a low from only producing 1,000 units per week. Keep in mind too that this is only from one of a few forms of generating revenues.
VYST $2.32 Valuation from Producing 1,500 Units Per Week
1,500 units per week x 52 weeks = 78,000 units per year x $8,000 per unit = $624,000,000 Revenue from Units
1,500 units per week x 52 weeks = 78,000 units per year x $800 per filter = $62,400,000 Revenue from Filter
Total Revenue from 1,000 units and filters = $686,400,000 per year
$686,400,000 Revenues x .25 Net Profit Margin = $171,600,000 Net Income
$171,600,000 Net Income ÷ 1,105,732,080 shares (OS) = .155 EPS
I'm going to presume a conservative PE Ratio of 15 for the Industry which VYST would exist to trade to derive the per share valuation to be as below...
.155 EPS x 15 PE Ratio = $2.32 VYST per share valuation
This $2.32 per share is where VYST should fundamentally trade as a low from only producing 1,500 units per week. Keep in mind too that this is only from one of a few forms of generating revenues.
Destruction of Viruses Verifies at Northeast Labs, a FDA Certified Facility by Dr. Bryan Stone
v/r
Sterling
Exit Strategy & Etiquette Thoughts for a Stock
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I never give investing advice; only my beliefs for risks in a stock.
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