The great thing about a growing company which is currently making a loss is that you can imagine any size future pie that you wish.
It is as easy to write '$100 million profit' as it is to write '$100 thousand profit' (probably easier: it has one less letter and you have that double 'l') so why not?
When a company starts being profitable in the accounting sense then often a reality sets in and the SP falls.
But PPH is not there yet and the simple Tiger Test for Tempting Techs is this question:
In the foreseeable future* can you see this company making a profit equal to 10% of the current market capitalisation (PPH market cap: $471M) ?
If the answer is 'No' it is definitely over-priced from your investment perspective.
Best Wishes
Paper Tiger
*a somewhat vague term that you will wish to quantify yourself
With cool charts like this anything is possible Paper Tiger ....so the answer to your question is very likely (in the foreseeable future)
Even on a log scale it would look pretty good
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
You have to ask yourself on what basis did you buy into this fast growing overachieving huge potential tech company in the first place,do you not believe in what is being achieved and the potential here?
My personal view is,that this is THE tech company with the greatest potential on our market at the moment. Another DIL in the making as far as I can see.
Now I might be overhyping,then again I may not be.
Agree Kizame - I will be accumulating throughout March and think the SP will float lower during this time. From then on, its all upwards with frequent announcements pushing it higher (one in each of April, May, and July). I am pretty confident $72m ACMR will be reached well before year end as well.
"His loyalty couldn't be bought at any price; but it could be rented remarkably cheaply."
Paper Tiger makes a good point - will PPH ever justify a $471 market cap?
But I'm beginning to wonder if the clever people have done their sums (DCFs etc) and come to the conclusion that current valuation is about right assuming growth continues and there's no disasters / hiccups along the way - in other words in $2 about the righ price for PPH
Recall Xero - plenty of hype around $18/$20 and it shot up to over $40 before the sums were done and it drifted back to $18/$20 and has stayed there for a long time.
With PPH was the hype/excitment to $2.75 the big spike up (like Xero's $40) and settling back to $1.80/$2.00 an indication that is what PPH is really worth. If it follows Xero then it could stay around this level for some time .....unless something bad happens and the share price collapses.
That happened to DIL and he share price did recover but not back to previous highs. It found a level that the market was 'happy' with and stayed there for a while until 'taken over'
Just thinking aloud here - beginning I've paid over the odds for PPH - but then it could be all OK if the world stays so happy and things like Snapchat fly to make tech the in thing again.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
No worries mate, every 15 years or so along comes another generation of investors ready to push things into the stratosphere so taking into account the last huge dotcom tech bubble of 2001 16 years ago, we're already overdue by one year. XRO taking so long to get cash flow neutral it is a sick joke and doesn't bear any comparison with PPH.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Originally Posted by Paper Tiger
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