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Perceptron, Inc. Message Board

  • roboklerk roboklerk Aug 29, 2013 2:27 PM Flag

    FY2013 EPS $0.60 Ex-Investment Gain Vs. $0.34

    Don't know about anyone else, but i was hoping for maybe flat at best based on the limited guidance, not a near doubling of earnings. Now for FY 2014, no analysts cover the stock---at least no sell-side analysts. Buy side analysts will do their own modeling and hold the numbers internally. Because of the paradigm shift due to Helix, all the focus on EPS and future valuation will have to look forward--no trailing 12 months analysis here. Backlog is strong and bookings are starting to ramp. So I figure looking at the components of Revenue: volume could go up at least a little, price could go up at least a little as demand increases, and finally the mix shift could improve (i.e. be more favorable due to an increasing share of Helix in the revenue mix) more than a small amount--at least a moderate amount. The co. indicated operating expenses are NOT expected to go up much. Growth will be internally financed w both/ample cash on the Balance Sheet and free cash flow being generated. It all sounds ok to me, just gotta plug in some percentage guesstimates--but the operating leverage is certainly there.

    Then comes the tricky part---Valuation, i.e., the multiple applied (to EPS, EBITDA, gross after-tax cash flow per share, free cash flow per share, it's dealer's choice which metric you what to look at). But what number for the multiple is where it gets tricky--how long is the cycle? are secular trends in place w/a burgeoning middle class in China, India, S.America? Is Helix a disruptive technology w/its own secular trend where proprietary algorithms can be updated and expanded yearly? Will there be a race by customers to get the technology?how do you factor that the speed w/which Helix is being accepted is already exceeding management estimates? So that's the brain teaser: come up w/the appropriate number you want to look at, put a multiple on it, jiggle the handle for secular trends, dominant share of market and exclusivity w/a debt free balance sheet.

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    • And don't forget to back out that $3+ per share in cash.

      • 2 Replies to roboklerk
      • robo- I agree that thing look exciting with the Helix pontential. In the CC, a private investor asked about other applications for Helix, and the company said it would only be for the automotive sector for the next few years. Still I think there will be nice ramp up coming in 2014. I personally see no reason to think we couldn't see $.90-$1.00 in 2014. Attaching a PE is always crucial of course. I personally give the stock a conservative 15-20 PE going forward for the very strong growth potential. What PE would you attach going forward ?

      • If volume, price and mix (i.e., Helix taking an increasing share of the total revenue component since it only appeared in 4Q of FY 2013 ,and will be there full year for FY 2014, plus accelerating throughout the year as it goes) come together for a 15% increase in total revenue and operating expenses and the tax amount are tweaked upward modestly, it is not out of the question to reach $0.90 per share in EPS for FY 2014 IMO---a 50% gain from FY 2013 (excluding the one-time gain from investment in FY 2013). Put your multiple on that (even though EPS growth would be 50% under that base case I personally would not use a 50 multiple). Then don't forget to add back another $3.10 for the cash per share which is contributing almost nothing to EPS. Depending on the valuation multiple you want to use, you come up w/a pretty interesting price I bet. If you want to layer on something for the strategic value of an exclusive paradigmatic shift in technology--go ahead.

 
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