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Msg  55239 of 55274  at  5/16/2019 6:01:23 PM  by

immr oldie

The following message was updated on 5/16/2019 6:03:05 PM.


Well, at least he was honest -- brutally honest -- about the intermediate prospects. This is really a complete reboot on so many dimensions. His comments about the difficulty with layering revenue from new industries (e.g. auto) on top of revenue from existing industries rings very true. The problem has been (forever) the maturation of currently addressed industries before new targets kick in. Resulting in a fairly flat revenue growth curve (forgetting the Apple thing from last year which in a previous world would not have been all counted as revenue.) Each preceding industry seems to experience declining revenues prior to the next kicking in. Gaming matured before mobility kicked in and mobility has matured before autos will kick in. I don't think there is much to be done about this.

I had thought a bit about this issue several years ago, but with rose-colored lenses chose to ignore it.

Give credit to the company for not grabbing any of the new Sony revenues prior to 2020. A base is established at the current level and the Sony revenues are likely to be a large part of any revenue growth in 2020. Current analysts are forecasting a 20% growth in revenue for 2020. From about $38Mm to $46Mm. Believable, I think.

I run a little valuation model which tries to anticipate a "fair" price for IMMR shares when compared to other tech companies -- certainly not perfectly comparable. But useful. With a 20% 5 yr compounded growth in revenues (really, gross earnings), the model suggests IMMR ought to be priced in the $12-$14 range. No one is prepared to believe that, of course, as never has the company experienced 20% annual growth over a multi-year period. If it delivers 10% compounded over that period then the current price looks about right.

Whatever it is, history teaches us that it'll be lumpy and uneven -- but maybe, with the new CEO recognizing this as a problem (as suggested by the CC), we'll see something better. And professional investors will have more confidence with a recovery -- but patience is the order of the day. This won't be accomplished in less than two years...

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Msg # Subject Author Recs Date Posted
55240 Re: CC... joncon63 0 5/16/2019 6:34:22 PM

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