I am also looking forward to their Grow Everything Appliance (GEA) too. They say the market for it is a billion dollars worldwide, so it will be interesting to see how much of this market they can actually end up capturing. I also wonder what their margins will be on this product, but in their 10-K they stated that their newer products have higher margins so maybe this will hold true with the GEA too. I have several questions though so if anyone could answer them that would be great.
Even without their new and likely best selling future product, their most recent earnings report still showed sales increasing over 3x y/y due to COVID-19, and they expected that growth to last for their full fiscal year of 2021. That sure is some confidence, so how accurate has management been in the past when it comes to guidance?
If that is the case, their net income could be around 20 million this year alone since they won't have to pay taxes due to NOL's. What are you thinking their net income could be this year?
If they do end up making 20 million this year, what kind of multiple should this company receive? Let's just say management is right and sales do increase over 200% this fiscal year. What will their sales be like in the years after that? Will they go back to normal, decrease, or increase? A lot of that will depend on the progression of the virus/vaccine, but their new product launch this upcoming quarter does give me hope of increasing sales from here on out for years to come. Furthermore, I am looking forward to actually seeing what their GEA looks like, but it sure sounds interesting and promising.
It appears to me that this company is undervalued by quite a bit so long as management is correct in their estimation of sales being up over 3x y/y for their current fiscal year. I would think that estimate doesn't even include the GEA, but I am not positive on that. Also, does this company have any recurring revenue? It looks like their seed pods need to be bought for each new crop, but I don't know the margins on that product or what % of their overall revenue it is since in their 10-K they attach "accessories" to their seed pod sales. Any insight would be greatly appreciated, especially since I have never used any of their products. Thanks!
