RE: Daily Briefing - re Novacyt1 May 2020 20:32
courtesy of pedr01 on ad*fn, sure he won't mind!
Re-visiting past presentations to remind myself why I am HUGELY overweight here ...
From Investors Presentation 2019 H1 Trading Update (pre-covid manufacture etc)
At the Investors Presentation for 2019 H1 (~11:24), Lyn Rees discusses the revenues for regional segments, viz UK +35%, EU +90%, and International +122%, where he states, "International jumped from £2.3m to £5.1m so really explosive growth from those territories, which give us overall rate of 98% growth and I'd like to think that when we launch the Illumina NIPT product we will return to the growth rates that we see for the rest of the world for both Europe and the UK."
Let's not be greedy, so assume a growth somewhere between 30% and 120% => 75% (in the middle) as probably do-able.
The SimplyWallStreet Stock Valuator (Discounted Cash Flow model) estimates that a price of 18.0p implies a growth rate of 8.8% which is CLEARLY an underestimate for the growth rate going forward
For a 30% growth, the SWS valuation is £0.42 58% undervalued Seems low given immenent Illumina CE
For a 45% growth, the SWS valuation is £0.71 75% undervalued ***** most likely *****
For a 75% growth, the SWS valuation is £1.94 91% undervalued
According to SWS, the DCM model assumes 3 years constant growth which then tapers off to a perpetual growth rate (10yr govt bond rate) after 10 years.
Assuming that covid-19 will have a slight negative impact etc I would personally view the region of 45% as most the likely going forwards assuming Illumina CE.
No advice intended ..
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