iQSTEL Inc (IQST)

[snow]

Boiler "TMUS (T-mobile) is an excellent example Snow. Looking at their valuations, they first became profitable in 2013 showing a net income of 35 million. Their market cap in 2013 was 26.97 billion. That was a P/E ratio of 770." I have checked he most recent 10K. It shows a net profit margin of about only 3%. This suggests that profitability among telecom companies is very low and that there is little chance that IQST will ever achieve a net profit margin any higher than 2-3 percent.

The market cap in relation to the bottom line and growth by acquisitions as the way of growing fast can constitute virtuous or vicious circles. If the market cap is very high in relation to the volume of revenue/and or profits a company can acquire very attractive companies without reducing net assets per share. This makes it fairly easy to increase earnings per share by selling shares at a lofty price. This is a virtuous circle.

IQST is much cheaper in relation to the bottom line. It will therefore have to issue a relatively high number of shares to pay for quality acquisitions or acquire less attractive companies at a fairly low price. This constitutes a vicious circle. In this situation it becomes demanding or impossible to grow the net profit margin because the acquisitions have low profitability. The recent big acqusition is a case in point. It has a net profit margin of only about 1%.