Solar Integrated Roofing Corp (SIRC)

[Mr muse]

Any article today looking at the yearly report is exactly the type of thing people expect. They look at the previous 12 months. They analyze gross margins and make assessments based on history. This is perfectly normal. Valuations are based on trailing 12 months.

This is why year over year quarterly reports are very important to read. It is also very important to factor in guidance which some want to ignore if they are accumulating and want others to sell.

However, I believe looking at the last report to see “current value” is typically how it is done.

This is why quarterly reports that show current revenue, margins, share counts, and expenses are so important to show improvements.

We also know people who research companies will set their own expectations based on reports, forward looking statements, and their understanding of the current market and industry.

So we’ve been told they were at a 50-60MM run rate months ago and expected to be 100MM by end of summer. So I’m making expectations based on those. If they come short, investors don’t like it and morale and interest goes down. If they exceed it SOME, then it’s a positive if there can be reasons why the estimates were off.

We expect margins to go up. Based on the discussion on the sales team and synergies.

Each quarterly report will create new expectations and new adjustments in our trust in forward looking statements.

High growth organically is very important to see.

We will hit a 7-10x revenue multiple for market cap will be normal for a healthy industry with a 25% margin with 50% organic growth.

Also, the revenue is generally the previous 12 months. So a 10MM quarterly report for Q1 added to last three quarters of the previous year is About 25MM. So in that view we are trading at 9.46x revenue. Which might be considered in range. With each quarterly report the previous 12 months of revenue will increase towards the run rate. But will not be 100MM until next year.

10x 100MM is 1Bn and divided by 338MM is $2.95. That should be seen as a one year target.

This would be based on no surprises, meeting or exceeding expectations, no change to growth, and no industry issues like lack of supplies.

Given all these things I think we are currently priced fairly with growth heading to $2.95 in the next 12 months.