The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Thanks Demon_G - that’s a good analysis.
I suspect there is some room in the forthcoming financials to assign revenue to a particular year (should it be felt necessary to ‘control’ the share price...
However, once the C19 challenge studies start getting announced... well, they are 10million+ a go and a fair chunk of that will be profit.
I can’t wait to see what that does to the share price :-)
Had a review of the Arden note this morning, which has a valuation of 36p currently. I still believe they're way off the mark but its certainly more in tune than our good friends Finncap, I can understand why they are being prudent though, they don't have much to go on.
The valuation is based upon £53M revenue in 2021, so it is on the low side. However, if we believe that the revenue this year may be double this figure then it throws up an interesting SP. The Target Price of 36p (£240M MCap) is based on FY21 forecast, for FY22 they have upped their revenue forecast to £75M. Interestingly, the EBITDA goes from £11M forecast in FY21 to £18.4M in FY22, an increase of 64%, so with increased revenue they agree that 30% drops to the bottom line, as opposed to 20% at £53M. The EV (EBITDA) value for FY21 is built at 20x. Translating this to their FY22 (£75M revenue) forecast gives us an SP of 55p. If we were to hit £100M revenue we'd be looking at £25M EBITDA which equates to 75p SP. It's all pie in the sky just now, but if we can get some solid figures for Q4 then it will go a long way to determining our SP destination. This is solely on core business.
I think both brokers will be waiting until our FY20 results are published, they'll definitely have more meat on the bone to work on, and only then will they be able to get more up to speed. What I did like about the Arden note was the bottom commentary:
Investment thesis and valuation - Our valuation for Open Orphan is derived from comparable earnings multiples and we have highlighted on a number of occasions how there is nothing in the valuation for the clinical development assets which yield no earnings at this time and where valuation is somewhat unclear. That said, we have maintained that the potential monetisation of these assets, whether non-core assets, Imutex or the recently announced Disease in Motion initiative could create substantial upside to our target price, creating strong shareholder value and we are beginning to see this come to fruition.
Love the word substantial. GLA