Marc De Mesel: Potential Retailer 'At Home' Group 10X
Even if Revenue Growth of $HOME decelerates and stays at same lower level of this year 2019 (+18% vs +23% years before), Revenues will still double in 5 years. If Gross Profit stays also at lower level of 29% of Revenues in 2019 vs 33% before, and Net Income/Earnings stays at avg level of 11% from Gross Profit, while amount of shares outstanding grows at a slower rate as before of 4% per year, a realistic estimate as it's actually going down as of 2019, Earnings Per Share would still go up considerably from current $0.70 to $1.07.
If share price does not change it would mean we go from current historically low P/E ratio of 9 to 4, very unlikely. Much more likely, since we are in commodity bear/stock bull cycle, it's good times ahead for the economy and we go back to previous high of 60 P/E ratio, or Price to Sales ratio goes from current historical low valuation of 0.3 back to 2.00, giving a market cap of $5 billion, up 12x from current $400 million, and up 10x on value per share from current $6 to $60.
Links:
Updated Sheet $HOME Analyses
https://docs.google.com/spreadsheets/d/1LtNmByesVjgVjcr8LfeKxK_rULVo5eWWSJNqXuRV4aQ/edit?usp=sharing
Speech CEO Lee Bird: "Lecture in Company Ethics":
https://www.youtube.com/watch?v=fjAOkemJQ6U
"Tesla Corrected, Switched $ARKG for $HOME":
https://www.youtube.com/watch?v=7xQ0RW-s_gY
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- Read full article on: Marc De Mesel
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