By potential Earnings:
The Math:
We need some information to do the math, and we do have to guess on some of the information, but we can be conservative, and show samples to come up with reasonable estimates.
First we need earnings per share, which we'll calculate like this:
(Earnings per engine)*(Engines sold) / (All MVIS shares) = Earnings per share
Earnings per engine: $10. A question was asked at the ASM, and the answer gives us a hint that the earnings per engine could be as high as $30, but it will probably be $17. To be conservative, $10.
Engines Sold: 10,000,000
I will use a 10 million units sold threshold. It's arbitrary, but I have two data points as my reasons:
Sony statement of 10 million DGL demand for 2014 Reference Link
Sony statement of 10 million DGL demand for 2014 Reference Link
Apple sold 9 million iPhone 5s & c models in one weekend link
(I know it's arbitrary, but this is an indicator of the kind of demand that can exist for a new electronic gadget, and the iPhone 5s released had dubious distinction from the previous iPhone5)
It is entirely possible that Microvision will produce and sell 10 million PicoP engines by this time next year.
It is entirely possible that Microvision will produce and sell 10 million PicoP engines by this time next year.
All MVIS Shares: 43,000,000 Look next to "Shares outstanding"
Do Math: Earnings = $2.33/ Share
Price to Earnings Ratio:
Arriving at a price to earnings ratio is not easy. There are a lot of factors that play into what the public is willing to pay for the earnings of a company. Those of us who have seen the prototypes know that this product could be insanely popular. ( I think it could make 50% of televisions & computer screens obsolete. I think it could be easily included in 50% of cellphones... more on that later.)
But the best way to come up with a PE ratio is to compare and go conservative.
(Earnings per Share)*(Price to earnings Ratio) = (share price)
The following is compared to the PE ratios of other companies found in a screen of stocks. Other than Solera, which I chose because it is the highest PE I could find, the others are mostly familiar companies. Safeway is a grocery store chain -- trading at a PE of 170! The @10 million units column would be the price of MVIS at $2.33/share earnings with the same PE.
I found that a reasonable PE ratio target of 80 gives us a decent (and conservative!) price target of $186 for ten million units of sales, but as is obvious here, the PE ratio could be (and probably will be, significantly higher.)
| Stock | PE | @10 million Units |
| Solera | 6882 | $16,004.65 |
| Amazon | 527 | $1,225.58 |
| Skullcandy | 382 | $888.37 |
| Dreamworks | 339 | $788.37 |
| RFMD | 247 | $574.42 |
| Checkpoint | 203 | $472.09 |
| HomeAway | 192 | $446.51 |
| Netflix | 177 | $411.63 |
| Safeway | 170 | $395.35 |
| Reasonable | 80 | $186.05 |
Market cap at $186/share? About 8 billion. Which, considering the sale price of other companies in the tech space, is very reasonable for a technology like Microvision's PicoP.
Total Market penetration:
The target arrived at above, is at ten million units sold.
In 2013, nearly a billion smartphones were sold world-wide. (967,775) Link
The PicoP could be sold for many more applications that just smartphones, but they are an interesting and contained market, and embedded cellphone applications are the "holy grail" of the PicoP marketplace.
There will certainly be competition for the PicoP. They won't be in every cellphone produced, but they could be in a lot of them.
Trying to account for every other market that could include PicoP would be very difficult. Millions of handheld games, tablets, laptop computers, automobiles, etc. are sold that could easily and beneficially include PicoP for customer benefit.
So, I have as a market size target 10% of smartphone sales world wide. I believe this to be reasonable. This kind of market size would take some time to achieve.
If we take the same earnings per engine & the same number of shares of MVIS and 10% of the smartphone market. Total company earnings would equal $960,000,000. Earnings per share would equal $22.33
and the same PE ratios, we then end up with price targets like this:
Microvision @ $1,786 /share?
In 2013, nearly a billion smartphones were sold world-wide. (967,775) Link
The PicoP could be sold for many more applications that just smartphones, but they are an interesting and contained market, and embedded cellphone applications are the "holy grail" of the PicoP marketplace.
There will certainly be competition for the PicoP. They won't be in every cellphone produced, but they could be in a lot of them.
Trying to account for every other market that could include PicoP would be very difficult. Millions of handheld games, tablets, laptop computers, automobiles, etc. are sold that could easily and beneficially include PicoP for customer benefit.
So, I have as a market size target 10% of smartphone sales world wide. I believe this to be reasonable. This kind of market size would take some time to achieve.
If we take the same earnings per engine & the same number of shares of MVIS and 10% of the smartphone market. Total company earnings would equal $960,000,000. Earnings per share would equal $22.33
and the same PE ratios, we then end up with price targets like this:
Microvision @ $1,786 /share?
| Stock | PE | 10% smart phone sales |
| Solera | 6882 | $153,644.65 |
| Amazon | 527 | $11,765.58 |
| Skullcandy | 382 | $8,528.37 |
| Dreamworks | 339 | $7,568.37 |
| RFMD | 247 | $5,514.42 |
| Checkpoint | 203 | $4,532.09 |
| HomeAway | 192 | $4,286.51 |
| Netflix | 177 | $3,951.63 |
| Safeway | 170 | $3,795.35 |
| Reasonable | 80 | $1,786.05 |
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