CryoPort Inc (CYRX)

[baseball fan]

DW-We finally have a BREAKOUT and reputable analyst coverage!

Furthermore, his sales estimates appear to be very conservative. What’s debatable other than that?

From Page 17:

As we do not expect CryoPort to post positive EPS until fiscal 2013 (ending March 31, 2013) and believe valuations based on price/sales comparables are too general and can be misleading, we use a multiple of our long-term EPS estimate and discount it back to the present to value CryoPort.

Relative to an appropriate comparable for a P/E multiple as CryoPort s business is relatively unique, there are no publicly traded directly comparable companies. As such we use the air delivery and freight services industry average P/E multiple of approximately 15x - air freight companies should directly benefit from the expected growth in cold chain shipping (although maybe not to the degree CryoPort should) so we think this a reasonable comparable.

As CryoPort is still very much on the front end of its roll-out, it remains very much a guess on what its future will look like. To account for this uncertainty we use a 20% discount rate which we believe appropriately reflects the inherent risks of an investment in CryoPort. Applying a 15x multiple to our fiscal 2015 EPS estimate of $0.50 for CryoPort and discounting this back at 20% per year (through 3/31/2012) results in a valuation of approximately $3.85 per share.

A greater rate of acceptance relative to our current expectations could prompt us to raise our price target.

DW-The CYRX train has finally left the station. Get on and enjoy the ride.