Originally Posted by
MAC
Of course the interesting thing about that Edison valuation range, $0.42 to $3.57, is the two key sensitivity analysis variables giving rise to it, “price point”, and, “market penetration”.
Want to know how Pacific Edge are doing, and where to place them in that range from the pending report ?
1. Then look for an indication of present price point beyond the $550 per test proposed by Pacific Edge in 2011, noting that both Forbar and Edison expect it to rise over the next few years, and,
2. Assess progress against plan for market penetration in 2019, and a reaffirmation of the five year goal.
And no, for the cynical and FA challenged, very early sales at FY15 do not tell you anything about the ultimate market penetration potential. The pending sales figure matters bugger all.
“Our sensitivity analysis suggests a value range of NZ$0.42-3.57/share depending on price and penetration in the US; in our base case we assume pricing of US$650 and 10% market penetration for Cxbladderdetect. Pacific Edge is at the start of the commercial roll-out and, as such, there is still considerable uncertainty as to the full sales potential in the coming years. We consider the chief variables are the level of market penetration that can be achieved, particularly in the US, and average pricing. Our base case is on the conservative side in both regards, therefore we expect significant upside potential on our forecasts if Pacific Edge’s performance exceeds our cautious expectations”