Analysist Updates, page-7

I understand the concerns you and others express re the recent explosive sp and the market valuation of $570m for the company, and there may well be some sagging of the sp soon.
However, in considering valuation for NEA you may now wish to reconsider whom the comparators might be.
Consider what characteristics NEA has:
- market-leading capture technology (and capture is relatively cheap) ie Product Production Cost is moderate to low and the same product can be available to any number of Customers at a marginal cost to NEA of very little
- Base Product (the photos) can be used for several Customer Products and Industries
- the Sales Process has been worked out and is increasingly profitable (Australian market shows this)
- New Customer Products are producing new business
- Business is scalable by geography (demonstrated in AU, and now being shown in USA)
- Business is scalable by product eg new 3D
- Business is scalable into new industries eg as shown in solar, asset mgt, local govt, infrastructure, policing, planning
- market penetration is still low (even in AU)
- customers benefit more when they incorporate NEA products into their businesses, and customers become sticky
- replication of NEA's historical datasets cannot be done by any competitor (which is particularly useful to some users)
NEA is a scaleable tech company.
So while accepting your points, I think that we need to consider what type of companies are the appropriate comparators for NEA. All the ones I will list below are further down the track to maturity and spread than NEA, but they shared many of NEA's current characteristics (and some still share them).
XRO - Xero market cap. $6B
CPU - Computershare market cap $10B
COH - Cochlear market cap $9B
CSL - CSL market cap $88B
Facebook market cap $x00B
Now I am not saying that NEA is or will be one of these, but it does help to make some comparisons of characteristics and valuations.
The last set of results - indicated by the recent announcement but not yet finalised - is beginning to make some investors think in a different way re the company, its future and its valuation.
You can't do a Discounted Cash Flow (DCF) on a company where the growth rate dramatically exceeds the discount rate - the answer is infinite.
You can't value well on a P/E basis if the growth rate of the E may be very high (P/Es only work where E is stable or moderately growing).
So when considering current valuation for NEA, we can now find it useful to consider just what the company may be in 3-8 years, and those comparators and others can illuminate that assessment of valuation.
GLTH