Looks like an IPO with long term prospects.
Sales growth has been impressive but no earnings since 2008.
Might make a nice move quickly but a lot of folks are probably watching the stock right now.
What I like (data from Prospectus & seekingalpha.com):
1 Sales growth last five quarters: 208, 691, 191, 490, and 207%
2 Sales for year ending March 26, 2010 $149.8M
Year Ending 2009: $39.7M ($110.1M increase)
3 Has enabled more screens than competitors (Dec. 25, 2009): RealD: 4286 versus Dolby: 1960, Xpand: 1560, MasterImage: 500, IMAX: 300.
4. 3D looks to have a bright and growing future
What I don't like:
1 No earnings since 2008
2 Expected decrease in revenues in Q ending June 25, 2010 compared to March 25, 2010 (from Prospectus)
3 Possible further dilution resulting from the exercise of options and warrants and further issuance of shares
4. Unclear how many shares are issued and outstanding. I think it ends up being 47.6M but there is a 1.5 split to consider and a lot of factors making the prospectus difficult to decipher.
5 Price to Sales (assuming 47.6M shares, $150M sales)
$16/sh = 5.1
$19/sh = 6.0
$20/sh = 6.3 (this is a bit high)
6 History of 3D is hot and cold
This one looks to have legs based on the 3D story and impressive sales growth. It should move fast depending on sales and earnings growth.
Thanks. I see that now after re-reading the S-1/A, at least the active eyewhere technology and the partnerships with Sony, Panasonic, and Samsung.
But there's no mention of Spectragraphix, and googling it turns up nothing. Where do you get this information?
Real D offers a different technology for the home than the theaters. They license that technology to Sony, Panasonic and Samsung. Real D acquired an active-glasses company called spectragraphix and hold their patents. I am not sure if Sony Panasonic and Samsung are currently paying licensing fees to Real D for the shutter lenses they currently sell, but this technology is in their patent portfolio.
Very intersting reading the 10-Q.
Contains some nuggets not obviously apparent when you first think about this company.
1) Unrecognized stock options held by the motion picture exhibitors.
2) Company states that revenue growth will be impacted by pricing pressures on the 3D glasses as more screens and movies are added. Could that mean if 20% more screens are added, prices for the glasses could fall by more than 20%?
3) Speaking of the glasses, the recycling program certainly is a significant expense. Hopefully a good chunk was for the establishment of the facility, but think about all the glasses that don't get returned at the theaters and the cost of transporting them back and forth between theaters and the recycling facility after every use. Could the cost of making the glasses for one time use be cheaper than the cost of recycling them over and over again?
Definitely some things to think about.
At Comic Con it was learned that the studios are mandating producers/directors to make all action movies 3D. There is some resistance but most are complying but very few producers are putting up their own money.
they seem more mass-market whereas IMAX only premium niche. RealD also specific play on 3D, whereas IMAX rides blockbusters such as Inception, Eclipse, Transformer 2, Iron Man 2 etc. that are NOT necessarily 3D. If 3D is a new paradigm then RealD seems like a winner (although significant growth already priced in) but if it's only a fad and consumers think that it's simply a way for theaters and studios to raise prices (such as the god awful 3D conversion of Clash of Titans or simply crappy product like Beowolf) then there may be trouble ahead. 3D brings advantages to animation where it is both easier to create and adds visual depth to the product so I think that becomes the "new normal" but in other films the utilization of 3D needs to be selective or otherwise lends itself to over-exposure.
Just read a more careful analysis that the number of shares may be about about 10% higher than I estimated based on exercised options and warrants. It's a bit of a refinement.
It looks like we will get some info on August 2.
bottom line is, as most people have commented, RealD needs to show continued sales growth and positive earnings.
If so, RealD can be considered the real deal!