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there are different metrics for different kinds of industries.
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internet, high-high-growth companies get high multiples of sales, let alone profits ( profits often come later for NET companies ) .
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let's figure that tirex is a high-growth company. then a fair place to start is to consider the market cap to be fair at around 10 times annual revenue. remember, this is just a starting point for discussion only.
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so at 2 cents, the company is worth 2.5B shares times $0.02, or $50 million dollars ( if the 2.5 billion shares have all been issued ) which implies underlying annual revenue of $5 million for this high growth company ( at valuation being 10X the revenues ). yes, the revenue is not there yet.
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let's then posit $25M in revenue, which is five times higher. then based on our loose formula, the company can be valued five times higher, which is $250 million, or ten cents a share.
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and we can find high-growth companies that meet this metric.
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will tirex get to $25 million in revenue ? seems likely if things work out.
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will tirex remain a high-growth company ? you bet !
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still, we can find stagnant ( yet still profitable ) low growth companies that are just about worth their gross annual revenue. but i don't think that's tirex for sure.
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again, just a starting point, it is too early to do P/E ratio, because you gotta get revenue first to get profits, right ?
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snowiegeorgie
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