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Shearclass ncyt is PCR, omega is antibody testing. They have completely different usages
The mologic deal is a bonus compared to the consortium development of a POC device
Youu are also trying to compare apples and pears
You evidently haven't done your research have you MORON this little bit of business with Mologic is worth anything between 15 to 30 million quid to ODX. So shut your pie whole. Thats coming from someone who was buying NCYT at 20p
Shearclass, what are you doing on the odx bb promoting the merits of a different company?
Thanks Kevin0541. So you seem to agree that the Mcap is more related to earnings than revenue? The multiple to be applied to earnings changes by sector, but basing a mcap on anything to do with revenue is extremely speculative. So should people be very wary when they see someone calculate an Mcap based on a multiple of revenue on these BB's?
You've guessed all the numbers ... so of course your version of them supports your preference. Which is fine. Stick with ncyt if you want to.
Comparing the commercial potential, and therefore market caps of ODX to NCYT is literally apples vs pears.
My view as as follows; Mologic are the test provider, own the IP and therefore control the economics of production and set the price per test. They will receive the cash from the buyer (e.g the government) say it sells for £5 per test for arguments sake. They will pay ODX a % per test produced, let’s be generous and assume this is 20%. So ODX earn £1 per test on a gross basis.
However, NCYT own their test IP and so dictate the economics of production & set the sales price. They will pay their manufacturers (Cytiva / Yourgene etc) a % of the selling price per test, and retain the margin as their gross profit. If NCYT sells a test for £5 and pays a 20% cut, Yourgene get £1 and NCYT £4.
So based on the above example, ODX would need to sell a minimum of 4 x the number of tests to make the same revenue as NCYT. In all likelihood this multiple will be higher as ODX will have manufacturing overheads to cover & the NCYT sales price is more than £5.
NCYT had sold £17.9m of tests to the end of March, prior to scaling up to 4m (and soon to be 8m) tests per month. If ODX make £1 per test and sell 46k tests per day to Mologic, it will take them 389 days to reach £17.9m of revenue.
If NCYT successfully scale up to 8m tests per month and sell them at a notional £5 per test (by all accounts it’s closer to £10) that is £40m revenue per month for NCYT, it would take ODX 869 days to reach this amount of revenue, so over 2 years.
So no PDMSPiper NCYT is not overvalued, it is in fact grossly undervalued in comparison to ODX based on the above conservative calculations.
Interested to read a constructive response as to what the flaws in this analysis are, as to me it seems clear cut from a financial perspective. If you could invest directly in Mologic then it would be a slightly different story.
Similarly with the rapid test consortium, ODX are the manufacturer of the test, not the developer, so will only receive a small portion of any sales revenue. All IMO of course, and please do you own research.
Market cap is a pure multiplier of price times number of shares in issue. Share price is normally related to earnings as price earnings ratio. Healthcare often has a higher P/E ratio because of the possibility of stability and future growth, but tech is the same.
Good question. I would say the urgency to find a way out of this global pandemic (hopefully once in a lifetime) deserves a significant premium on what will be very large revenues. Hence the Market Capitals are justified.
I keep reading a lot in these health care stocks about their Market capitalisation being a multiple of revenue. I'm used to value's being worked out on a multiple of earnings. This makes much more sense to me on the basis of the old adage Revenue's vanity. profit's sanity. It's the profit that can be distributed back to shareholders as dividends that justify them lending the company money. Revenue on it's own is a very wishful way of valuing a company. Is there a good reason why health care stocks are valued like this?
If AVCTs primary business is oncology then they weren’t doing much of it. Their last reported revenue was only £4Million. That only supports an Mcap of £20Mill Max. AVCT Mcap is now £160Mill. The 8X bagger rise has happened because of Covid speculation. The affirmer technology is not proven to work on Cytivas test strip yet. That’s why I’m not buying it.
1.) The Mcap is massively toppy and based on speculative hot money.
2.) The Covid partnership that caused the astronomical rise is not yet proven to work.
I think it’s a very high risk play here but good luck with it and DYOR.
It isn’t advice. It’s just my opinion. Don’t take advice from anybody else.
PDSMPiper, thanks for the advice mate.
Hi Guys I have shares here and AVCT. AVCTs primary value is oncology not Covid. Covid will be extra icing on the cake for AVCT. Please don't deramp a share unless you know a little more about it. I hope that both shares do well- vested interest of course
Not my strategy mate. I don’t buy toppy MCaps with very little justification by revenue. IMO there will be a massive sell off in both AVCT and NCYT soon. There’s too much hot speculative money in there just waiting for the last bits of news before they dump them. Massive Mcaps, 163Mill and 288Mill.
Some loons are saying AVCT is going to 10bag on news. Ha. That will be a £1.63Bill Mcap. They’ll be lucky to get another bag out of it but the affirmer tech has even been proven to work on Cytivas strip yet so it could even go back to pennies. It’s a poor risk reward. I don’t risk losing all my capital in pursuit of a possible bagger. Not for me. I’ll play the long game and wait for ODX to steadily reach a £250 mill Mcap on news and revenue. Much safer. Much more sustainable. The stocks in my isa as a long term hold. Sell offs and retraces coming in the others. All too toppy.
PDSMPiper, new to this but wouldn't it have been better to have AVCT, ODX and another (not got any in NCYT missed out) to spread the risk. If any 3 to 5 times their value then great? More than 1 even better.
A lot of nonsense on this board. There is obviously significant interest here, with some posting naively thinking their words can influence the ODX sp.
Does the market exist for the following proposal - if a test was available that you could take at home, to find out if you’ve had the virus, would you buy this test? ODX is involved in the development of such a test. If the test is good then literally millions of people will want such a test.
The 30 strains discussion is only part of the picture.
There may be multiple genetic mutants out there but unless they mutate in the specific regions which code for surface proteins that antibodies are targeted against then they will be meaningless in terms of reinfection.
Any virologist will tell you that viruses mutate to become less lethal over time as killing the host is not a selection advantage for the virus.
Another bedwetter insecure in his own position who feels the need to come over here. Lol
Big sell off and retrace coming in these other Covids with overbought toppy Mcaps. Only ODX is in a scheme with guaranteed government orders. The rest of you are full of speculative hot money. ODX by far the lowest Mcap at £50Mill and by far the most attractive risk v reward profile.
1. From a commercial point of view, if antibody testing doesn’t prove or disprove whether you can catch Covid-19 again, why would any business or person pay for a test?
2. If the purpose of testing is simply to guide vaccine development, then surely the work is essentially R&D? As such, why would the margin on tests ODX provide to Mologic be anything than cost + 5%?
In summary, if antibody testing cannot provide an answer as to whether you can catch the virus again, it isn’t the golden bullet the government have been proclaiming it to be & IMO won’t generate meaningful revenue for ODX
Nobody can answer the question because the data isn’t available yet. That’s why they are instigating a mass antibody testing program to obtain the data, answer your question and use the data to develop a safe vaccine.
Tony at least I consider the facts if you can get the virus twice and they're are 30 strains how do you build immunity seems quite simple to me? Answer the question
If having covid 19 offers no future immunity, what's the point in an antibody)immunity test? Also reports of people getting this twice and over 30 strains so I guess that's why the ouch! No doubt this will still rise but is it purely hype is the question
Why ouch lol you won't get in cheap so don't waste your weekend
https://metro.co.uk/2020/04/25/casts-doubt-antibody-tests-warning-immunity-passports-12608431/
Ouch!
Dibs; A lot of these muppets sold on Friday. They’re traders gambling there’ll be no early RNS and they can get in lower than where they sold. They need to beat the spread so they’re just trying to desperately spread doubt and encourage fear with this nonsense.
Good luck with that lads. See you Monday. I’ll be sat watching with my popcorn as you chase it up.
Two more Coronavirus briefings before Monday to let the cat out the bag and gov constantly talking about antibody testing.
John Hopkins University let it slip on their site on Friday that the gov has pre ordered 3.5 million antibody tests.
They’ve deleted it today and said it was a mistake in another tweet. They know they let the cat out the bag. News soon. GLA.