EOS 1.54% $1.28 electro optic systems holdings limited

Valuation, page-4

  1. 161 Posts.
    lightbulb Created with Sketch. 5
    I Just want to highlight some very key points that came out of this AGM presentation that most might not understand here.

    On page 7 they go through and mention how they have spent a lot of money transforming and setting them-selves up for the next decade of growth. The second last comment they say: "All R&D fully expensed and EOS now has three new products with market launches from 2017 to 2019. Each addresses >$2 Billion in revenue" This is the EOS R-400s, EOS R-2000 and the Space sector for a total of over $6 billion in revenue.  Further down they mention that each of the defence products they estimate over $2 Billion in revenue between now and 2025. So it may be a little early to know if they again expect the $2 billion in space revenue before 2025 but for my calculations I will half that to $1 billion by 2025.

    So in the next 8 years the company estimates over $5 Billion in revenue which ideally in a business you want between 20-40% profit margins. I will go off 20%.

    So $5 Billion divided by 8 years is $625,000,000 per year revenue and 20% profit = $125,000,000 profit per year. Times that by 8 years and you have $1,000,000,000 (1 Billion) in profit over 8 years.

    Now given that 2017 is when the big orders begin to start coming in, the company takes time to build up to maximum production levels it is likely the majority of the profit over the next 8 years will come in the last 4 years and probably keep growing past 2025. Keeping in mind the company plans for "expansion exceeding 100% for the next several years".

    How many companies do you know of that are planning on growing at 100% for the next several years?....

    My projections are that this company will be worth 5 Billion or more by 2025 which means this stock could see a 2500% increase in price over that time frame. Which is why I will be going all in over the next 6 months. Of course DYOR
    Last edited by Wiseman: 14/05/17
 
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