Xcelerate Inc (XCRT)

[mike306oh]

UDHI Valuation

From today's 10-Q:

In the Consolidated Statement of earnings the Company reported a profit of $120,494 from operations for the quarter on revenues of $652,709 as compared to a loss of $117,570 on adjusted revenues of $556,739 during the same period in 2007.

Assuming the profit margins remain the same for the next Q. then $120.494K x 4 = $482K/year. With am OS of about 120 MM, the net profit/share will be about 0.004/share. Assuming a P/E ratio of only 10, the PPS should be about 0.04/share (very conservative), and for a P/E ratio of 20 (considering the company's growth), the PPS will become 0.008/share.

The P/E - based valuation above, is in good agreement with the Price/Sales (P/S) ratio valuation. The present P/S ratio is about 0.31. For a growth company (especially one that has just posted the second consecutive Q wit positive net income), the P/S ratio should be at least 2. if so, the PPS should be at least: 2/0.3 x 0.008 = 0.053/share

In summary:

From the P/E ratio, the PPS should be between 0.04 and 0.08

From the P/S ratio, the PPS should be at least 0.053.

My Conclusion: Good times ahead!

Mike