With the AOL settlement and Yahoo loss etc, I am not sure that the IP value has been squeezed out yet because AUGT (HC) is trading around 2 times sales. Velt and MM are 1 times. So AUGT simply valued looks as if it is over priced. I could understand the higher valuation if HC were growing quicker han the competition, but its not. So the only reason for the excess in valuation I see is the IP (core). You can argue that acquisitions in past were valued at X times sales. That was then and this is now. The take- over valuation (if it ever comes) is only applicable at the time of the takeover. It may never happen.
So I think if/when further IP settlements come in at fire sale prices AUGT is in for a price adjustment, and my guess is that it wont be to the upside. On the other hand if a real major setllement or win happens (much less likely) AUGT may pop back to $.98
I am open to a discussion and would appreciate comments.
Bob, I just did some fairly quick math. I believe the best way to accurately measure P/S is by using enterprise value instead of market cap, as MM does have a substantial amount of cash on their balance sheet. When doing the calculation that way (which isn't beneficial to AUGT by the way, though it is more accurate), I came up with AUGT at 2.10X TTM revenues vs MM at 5.10X TTM revenues. So basically, the companies have a very similar growth rate, a very similar target market/product, but yet MM trades at almost two and a half times the P/S ratio Augme does, even AFTER accounting for the additional cash MM has on their balance sheet. Take AUGT's share price and multiple it by 2.5X's and that's fair value for Augme, and is the value proposition it offers potential investors at these levels.
I believe you have come up with the most reasonable valuation for AUGT. If I may add AUGt is trading ata discount because of the previous shenanigans, management not delivering, risk of ruin etc etc. (we all know the reasons)
If RH can correct what he said he would we may see the 2 to 3 X sales. I would even hazard a guess and say if the recent lows are not taken out , I would be a buyrer
We are another step closer to breakeven and our balance sheet is shored up a little more. If we breakeven prior to MM or VELT then we deserve that premium b/c then profitability is coming around the corner. I just hope Hussey doesn't use this licensing revenue in the 15% q/q growth and HC continues to meet that. Otherwise I'll be disappointed since this is a one time event.
Please, as they used to tell me in school, show your work. I see revenue at MM of $150 million (annualized) and a market cap of close to 1 billion. How is that 1 times revenue or sales????
I simply used Seeking Alpha portfolio setup to compare the players. Within the portfolio setup several valuation metrics inclding P to Sales
I am assuming that I am not only one who uses SA to compare and contrast.
Using the most recent Q, MM would be at ~$188 mm so I get 4.8 times. I think maybe he just tossed 1X out there to see if anyone was paying attention. Good try bob!
Bob, you're absolutely right. The IP value is now being set. It's pennies. AOL is a big company and they paid essentially nothing. The other so called infringers can't possibly be on the hook for but a tiny fraction of what AOL has paid. So 1x sales looks imminent. 25 cents. I'm surprised they even got $650k.