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Insomniacs post - PS Ratio What-If's

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PR_12   Friday, 11/20/20 02:13:59 AM
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Insomniacs post - PS Ratio What-If's

So my assumptions are based on treating Valens as a CPG company for the purpose of this hypothetical exercise. The average PS Ratio for CPGs is about 2.81, Valens is around 2.35.

If we were looking at PS Ratios alone, Valens at industry average PS Ratio would put stock price right about $2.01-$2.02. That is the average - and at their current ratio they are right there with some of the big guys.

So, on PE alone, we could actually say the stock price is in realistic range of price for that segment. On the low side for sure, but still realistic.

Now if we assume average CPG PS ratio, but our sales increase to $140M annually (2021 target from November investor deck (and I think low)), the share price should be somewhere around $3.13-$3.14.

Just for S's and G's, @ average PS Ratio:

Rev Theoretical Share Price
$200M $4.48
$250M $5.60

Obviously all that assumes no material change in number of shares outstanding.

So that was fun and it at least gives me one indicator to use when turning an analyst revenue estimate into share price based on average CPG PS Ratio.

Now the test, if you read down this far, do you want me to keep doing these?

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