Given the present market cap at 500 million, KREM should reach a market cap of at least 6 billion within a realistic 5 year time horizon based on present rate of expansion. Factoring into the equation a P/E ratio adjusted down to 20 and the industry average of 6% net. The stock price would reach the mid 700s'or split adjusted to an cost basis of $3.40 at todays current price. Stay long and eat those shorts.
If you do the math on your projections, using your estimates of 6 billion market cap in five years, 6% net income (which would be a generous 100% increase over the present), and a P/E of 20, you get a company with 5 billion in sales and 300 million in profit in five years. That is a CAGR of 87% in sales and 150% in profit. KREM is projecting a 15% incrase in EPS this year, and analysts are giving them a generous 25% for the following five years. Oh, and by the way, Tricon has a market cap of around 6 billion, and they have 30,000 units, knucklehead...
Your post was so infantile and preposterous, but I'll take the bait and refute you.
You suggest KREM should reach a market cap of 6 billion in five years, just based on the present rate of expansion. Hmmm, that would happen to be Starbuck's current market cap, a company with 30 times the sales and 20 times the income. So given your logic, five years ago KREM would have had sales of 7 million. No, closer to $120 million, buddy.
But let's assume you are right and the actual present rate of expansion does pan out, and sales and profits double to $440 million and $12 million. Hell, let's say profits QUADRUPLE, just to make it interesting. At SBUX current P/E (a very generous one, given the fact it is highest in the industry after KREM), that gives you a market cap of $750 million, or $64 a share. In 2005, not 2000. Of course, if profits only keep pace with sales, you get a price of $32 five years down the road.
KREM is a newly franchise operation, mostly independently owned with a small float. The value of the limited available shares increase exponentially with every dollar increase in market cap. The predicted share price at the end of a five year growth phase will reward the early birds. Isn't the whole idea of investing based on jumping in at the start of a venture. If you shorted McDonalds or Home Depot after these issues went public you got wacked. I am a buyer, staying long and view short pressure as an opportunity to buy and squeeze.