Thanks Golfo, appreciate your comments and calculations, WAGS and Dreams! lol
The average Drug(Biotechnology) P/S being 6.88 is not relevant to Avid(IMO) as we are just in the beginning of a very solid growth path. The stock market these days is all about valuing and rewarding growth. We are at the beginning of tripling or quadrupling our growth in the next several years and there are many many companies now trading many multiples of their future revenue projections....and a lot of them have not yet defined their profitability.
In fact a lot of companies are trading at crazy P/S multiples based on future revenue projections going out 5 to 7 years, so again here, I think your estimates may be very conservative.
Look at the growth path of Thermo Fisher.....with strong management and a solid business plan, growth can be achieved much faster than the timeline you were working with(or assuming). There is growth through internal expansion and also growth through acquisitions and mergers, and I know it sounds crazy, but a fast growing highly profitable CDMO company may suddenly find there are all kinds of options opening up to use their cash flow for external expansion!!
And of course there is the wild card of being acquired themselves by a larger CDMO manufacturer or Drug Company looking for a niche manufacturing hub to produce highly profitable drugs for their own needs.
Avid especially would fall into this category, and I am quite certain, that for a takeover to be successful, would require a successful bid to be at least twice their stock price at the time. So if we can get to $15 to $20 in the next 12 to 15 months(using your timelines), it certainly is not out of the realm of possibilities to be taken out for twice that amount....so $30 to $40 per share.
With our institutional ownership it will be very difficult for an acquiring entity to short the stock price lower in their efforts to achieve a takeover at a lower price. A company like Avid that is poised for growth and has lots of available capacity, in a field that is screaming for domestic suppliers of Biologics, is going to take a huge premium to succeed.
My WAG is a $20 share price by end of year 2021, and if there is any takeover speculation, much much higher!!
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