Your own personal worksheet:
Fill in your estimates for each value and follow the math prompts - I can't nest active formulae into a text message! Feel free to use published resources, such as recently referenced articles and whatever strikes your fancy, as long as you feel it is realistic. This is to gauge YOUR personal feelings about what this stock can do for you. But a big copy and paste share would be most appreciated! This serves as a sanity check on everyone's ideas about what this investment really means to each of us.
For the first one, you need to consider a few things, such as when you think they will go back to the well, and what the share price might be at that time. I am guessing they intend to delay fundraising as much as possible to try to get PPS up first and help minimize dilution) otherwise, why would their first closing be at a mere $5M US dollars?). Add these up to estimate what the total outstanding shares might be when we start generating revenue, at which point we should need any further dilution.
A. Estimated ultimate outstanding shares when this thing hits the market (include warrants, etc.): A=
Revenue estimates:
B. Sales estimate, # SPORT systems: B =
C. SPORT system sales revenue: C = B x $1.2M =
D. Est life per system, years, average: D =
E. Service contracts, est. annual price per: E =
F. Service contract revenue, F = D x E =
G. Training cost per surgeon: G =
H. Number of surgeons per SPORT for training: H =
I. Training revenue: I = G x H =
J: Disposables and re-processables, avg cost per case: J =
K. Number of cases per SPORT per year: K =
L. Revenue from per case supplies: L = J x K x D =
M. (M for Money!) Revenue total: M = C + F + I + L
(For reference, the recently linked report looked at 15 years of sales)
N. How many years are you forecasting for this exercise: N=
O. Average annual revenue over time span: O = M / N =
P. How many years of revenue do you think a market capitalization should reflect in this sector? (ISRG revenue was $2.7B and market cap is almost $35B, but a market cap equal to 14 years of revenue is not the norm!) P=
Q. Market cap estimate: Q = P x O =
R. Estimated share price: R = Q / A
Now multiply R times your number of shares to see what kind of money you think this will be worth for you personally... You needn't share this if you don't care to - you needn't share anything if you don't want to, but it would be interesting for everyone to help validate or refine their personal expectations.
As much as anything... dream big and have fun!
Please share! And feel free to add comments regarding any aspect of this exercise!
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