This level of sales in a press release is a Joke!
PrudentCapitalist- I do not share your enthusiasm.
Below is an excerpt from another board.
My view on Axis has changed.
The only thing that matters going forward is sales.(actual sales not potential sales) Not just small sales(unless your saying the business model is like Mcdonalds) but big sales. To put this PR release in perspective lets use some hopeful numbers and sound assumptions. Lets say we all hope Axis gets back to a dollar a share.(Which I do because I hold a significant percentage of the float)
To reach a dollar a share, if we assign a P/E ratio of 15 to the company, you would need about 6-7c per share yearly profit.(not just sales but profit) With approximately 60 million shares outstanding you would need about 4 million dollars of yearly profit to reach this level.(this is after taxes) If you assume a generous profit margin of 25%(this number is difficult to estimate) and a low tax rate of 25% you would need to have annual sales(revenues) of 20 million dollars to reach this level. The recent announcement was for 4000 ballasts which at 40$ per ballast is $160,000. 160 thousand divided by 20 million is not even 1% of the sales needed to reach this level.
These numbers explain why this company had prior spikes to 2-3$ per share on hopeful announcements by management that sales would be 25 to 40 million annually. The stock price took into account not only this level of sales but the potential for this number of sales to increase going forward. In view of managements prior grandiose projections, the credibility of future projections will be suspect until actually sales are booked in the multi-million dollar range.
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