A recent Forbes article on MSLP compares it with Schiff Nutrition International (NYSE:SHF). This company has a net profit margin of 6.4% and a P/E multiple of 16. MusclePharm, on a estimated sales of $100M for 2013, on similar parameters would realize a net profit of $6.4M. With 5.97M shares outstanding, this would translate into a price of around $17.15 which is a growth of more than 211% over the current market price of $5.5. The sales growth of MSLP is more than robust, and with increased focus on profitability, the probability of increase in stock price is very high. The segment where MSLP operates, the fast growing specialized supplements market, helps it sustain the strong growth momentum. CEO of MusclePharm has a goal of $500M sales within the next few years. Calculating with a 10% margin, this would translate into net profit of $50M i.e. a price of $133 at a conservative P/E of 16. With good brand recall and expected profitability on net basis, all this may be possible to a great extent. The intended listing within 2013, after the Q4'12 results in mid-April, will force the company into developing a palpable strategy to walk the talk of profitability. All said and done, it boils down to becoming EPS positive. Rest of the things like easy funding, better valuations, good PEG potential etc. will follow. The first quarter of net profits may also attract attention of bigger players looking for an entry or consolidating their position in this fast growing segment. A zero debt company with more than $100M in sales would be a good candidate for takeover. The good part is that MSLP has maintained its focus on research & development which is ever so important in this sector. Hopefully, it will be able to maintain its competitive advantage through newer and better products.