Valuation

UPDATE 3/6/17 (still somewhat in process)

MicroVision current shares outstanding. 66,090,000 (Yahoo Finance)


#1 -- Market Capitalization Comparisons (updated, 3/6/17)

Company	Ticker	Market Cap	MVIS at Same Market Cap	DATE (Market Cap)
Oculus Rift	--	2,000,000,000	$42.35	sold to FB
Snap Chat	SNAP	27,510,000,000	$416.25	3/6/17 Close
MobileEye	MBLY	15,000,000,000	$226.9	3/13/17
Himax	HIMX	1,230,000,000	$18.61	3/6/17
Univ.Display	OLED	3,840,000,000	$58.10	3/6/17

Comparison Companies:

Oculus Rift            -- Optical consumer electronics technology. (full explanation at link)
Snap Chat             --  Picture software and glasses that take pictures
Himax                   --  miniature projector, used in Google Glass (LCOS)
Universal Display -- Researches and commercialization of OLED display technology


I believe that MVIS is in a far better position than any of the above mentioned companies. It is quite difficult to find a direct comparison.

***

From a recent conversation:

"If someone will pay 15 billion for Mobileeye which has possibly about the same going for it as Microvision's 3D laser scanning business, what is Microvision worth now in the same marketplace?"

 Now, we admit that our knowledge of just what mobileeye has is limited, but on the surface it appears to be laser scanning and some software

3D Laser Scanning:  15 Billion
PicoProjection -- twice that? The market is certainly larger considering all mobile phones, and touch interactive picoprojection. 30 Billion.
Near eye displays? We don't know what that market is going to do, but it does look like it's going to be huge and growing for a long time. Let's say the same as MobileEye. 15 Billion.

That's 60 billion, based on the market cap of something sold very recently. You do the share price math.

My biggest concern is that stockholders will bite on a sell out that is far too little.


#2 -- Earnings Based Calculations

• 2016 Global smartphone sales 1,495,385,000
• Shares outstanding changes in March, 2017:  66,090,000
• EPS change on below chart... $1,493,868,000 / 66,090,000 = 27.17

10% of Worldwide smartphone sales:   149,635,800
Income/unit:                                      $12
Total Earnings:                                   $1,795,629,600
Resulting Earnings per share               $27.17


With Various PE Ratios:
80        $2,173
40        $1,086
20        $   543
100      $2,716
300      $8,150

My standard formula is this: ((SPS * IPU) / MVISSO) * PE = Share Price Target

(SPS)        10% Previous year's worldwide SmartPhone Sales 
(IPU)        Income Per Unit = 12
(MVISSO) MVIS Shares Outsanding = 66,090,000 (YF )
(PE)        Price Earnings ratio = 80

Why10% of previous years world-wide smartphone sales?

•  is admittedly an arbitrary  benchmark. 
• It is used because PicoP is a technology that is aiming at being an accessory or built-in smartphone component. 
• There will be competition, it can't be in all of them.
• It's a "low bar" for ultimate adoption. (for example the iPhone 8 will likely sell in excess of 100 million/units)
• It's actually a conservative estimate -- it ignores likely PicoP installation in cameras, portable gaming, tablet computers, automobiles, digital signage and other uses, ignores all LiDAR, and Augmented Reality Near-eye display market as well.

The NEW Wildcard

Since the last time this page was updated, things have changed. Instead of only PicoP technology available, we have new products. I will lump the small form factor engine, and the touch enabled pico projector engine together and consider the near eye display and the LiDAR are new products.

The touch-enabled PicoP projector engine 

The small form factor PicoP engine (let's replace Sony with this)
The Near Eye display
LIDAR

These new products are game-changing technology.  Lidar is essential for self-driving cars and robot guidance. Near eye displays are essential for augmented reality. There's a lot of competition in augmented reality, but Microvision's solutions have an advantage in size, power consumption, weight, latency and simplicity. 

Where does the $12/unit figure come from

There are two things that factor into that price: 

1) During the (2014) stockholders meeting, someone asked a direct question: "How many units do we have to sell to be in the black." The answer came back (quickly) as 1 million. During that year, the annual cash burn was 12 million or 1 million/month.

2) This year, during one of the conference calls, someone asked about the capital expenditures required to boost production -- the answer was that it would be a minimal capital requirement to do so.

Given those two bits of information and the company's repeated statements that their standard cash-burn is about a million dollars/month, I get my guess of $12/unit. There are a lot of other people who follow the company closely who have had wildly different numbers than that, both much higher and lower. (If they break even on the million units, we'd assume that the manufacturing costs that MicroVision would need to incur would be included.)

It's the best guess I have, but I do realize that I could be substantially off.

If you think the PE ratios listed above are high:

The PE ratio for a growth company can be very high... much higher than the 80 adopted as the standard. A 20 PE ratio is the kind of ratio a Utility, or well-established industrial company will have, like Boeing or Ingersoll-Rand, JM Smucker or McDonalds.

Some sample PE ratios:
These are growth companies being actively traded today: MVIS, when products start appearing will be a GROWTH company. 


The following table, takes the EPS above, and applies some of the higher PE ratios of real companies to it. (These are left over from the March 2015 Adjustment) This serves only to illustrate how crazy valuations can get. (This will be updated with current high-overvalued issues when I get to it.)

Company	Ticker	PE Ratio (March 2015)	MVIS with that PE
Shake Shack	SHAK	991	26,925
Barracuda Networks	CUDA	487	13,222
ConAgra Foods	CAG	288	7,824
Autodesk	ADSK	179	4,863

OTHER PRICE TARGET POSTS:

Oculus Market Cap Comparison  [ this blog 3/13/2015 ] 

What is Microvision Worth?  [ this blog 7/7/2014 ]
Various Price Targets  [ this blog 3/17/2015 ] 

*Everything contained on this page is the opinion of its author only. There are no guarantees of any kind. Do your own homework.*