I'm not bashing just trying to pressure test the theory here.
But the EPS on a business with a market cap of $300M and $30M in revenues (if we assume 50% profit which is a big if), is only 5 cents per share. Industry norms are $1.3-1.5 aren't they.
Same sort of skewed results would affect the P/E ratio and so the only way it seems that this could have commercially viable P/E and PPS would be if the ratio of common shares to earnings (300M/15M same thing if price is $1) were a lot lower than 20:1, hence my reasoning that one of the metrics has to change. They cannot boost profits so quickly so it has to be the number of shares surely, hence a RS must be on the cards going forward.
Eventually the old adage that if earnings cannot catch up with price, then price must catch up with earnings, has to apply and the OS count must come down.
What do the experts think?
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