Site Network: Home |

From today's PR:

"There are approximately 25,000 new heavy truck and automobile franchises in the U.S., plus more than 160,000 after-market repair facilities, according to U.S. Government Census statistics."
That brings us to a total US market of 185,000 repair facilities -- and according to the US Department of Labor, there were 818,000 US automotive service technician jobs in 2002.

So that averages out to a little more than 4 service techs per repair facility.

If Nomad has an average selling price of $3500, then here's what the revenue breakdown looks like for different market penetrations -- figures do not include Nomad accessories:

1% penetration (8180 units):____$28.63M

5% penetration (40900 units):___$143.15M

10% penetration (81800 units):__$286.3M

25% penetration (204500 units):_$715.75M

50% penetration (409000 units):_$1.43B

So a total market penetration of 1 Nomad per service tech in the US gets us to 818,000 units and $2.86B in revenue.

Assuming Microvision succeeds at 25% market penetration, at a relatively conservative 4.5 price-to-sales ratio, for the moment considering no other revenue besides Nomad Expert, that brings us to a $3.2B captialization and about a $150 MVIS stock price. It will be interesting to see what happens considering the aircraft repair, military and non-repair tech uses of Nomad that the company has planned aren't factored in here. And, this doesn't count any consumer product (EVF/Microdisplay) revenue, Flic, or MicroHUD -- or any contracts. Also, these figures include only the US auto tech service market. But, the rest of the world drives cars too, and they have the same web protocols and 802.11b wireless protocol that the Nomad System leverages.

40% efficiency gains (and associated cost savings), 'Top 20 Tool' status, and active promotion by American Honda to its dealerships suggest that Nomad Expert Technician will be coming onto the scene in a real way in the near term. With a potential $2.86B market, component sourcing problems resolved, and the product currently shipping to customers, the outlook is bright indeed.

So, just to refresh our memories -- 'pre-revenue' Iridigm with its LCD-like, fixed-pixel display technology is worth $200M to Qualcomm -- even with years to go before their technology is ready to move out of the laboratory. While Microvision, minus its $31.2M Lumera stake is worth $111M on the open market.

This seems like a disconnect that will be resolved quickly. Microvision's opportunities for near term revenue growth, powered by the Nomad System, are compelling -- and, looking out just a little bit further the potential becomes staggering.

Microvision will have its day in the sun -- when large volume Nomad orders are rolling in, the CNBC Squawk Box guys are trying on Nomads and talking about how cool they are, and MVIS becomes the 'hot stock' du jour. For now, we can enjoy being the types of investors who can shake off the post-dot-com/9-11 fear factor and embrace the possibilities of American science and innovation, before the sea-change becomes obvious to the rest of the world.


At September 14, 2004 at 11:10 PM Anonymous said...

Hey BJ,
Thanks for the math,
Assuming a 25% - 40% market penetration,
and the profit associated with it,
what would the stock price be at assuming MVIS posted that much profit, aside from their R & D expenses. Assuming normal price to earnings ratios for your basic tech company.
Thanks for blogging


Post a Comment

This website does not recommend the purchase or sale of any stocks, options, bonds or any investment of any kind. This website does not provide investment advice. Disclaimer and Notices: Disclaimer: This website may contain "forward-looking" information including statements concerning the company's outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. The information on this website includes forward looking statements, including statements regarding projections of future operations, product applications, development and production, future benefits of contractual arrangements, growth in demand, as well as statements containing words like believe, estimate, expect, anticipate, target, plan, will, could, would, and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the results implied or expressed in the forward looking statement. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements are included in MVIS most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission under the heading 'Risk factors related to the company's business,' and our other reports filed with the Comission from time to time. Except as expressly required by Federal securities laws, MVIS Blog undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events, changes in circumstances, or other reasons. Legal Notice: Although considerable care has been taken in preparing and maintaining the information and material contained on this website, MVIS Blog makes no representation nor gives any warranty as to the currency, completeness, accuracy or correctness of any of the elements contained herein. Facts and information contained in the website are believed to be accurate at the time of posting. However, information may be superseded by subsequent disclosure, and changes may be made at any time without prior notice. MVIS Blog shall not be responsible for, or liable in respect of, any damage, direct or indirect, or of any nature whatsoever, resulting from the use of the information contained herein. While the information contained herein has been obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. MVIS Blog has not independently verified the facts, assumptions, and estimates contained on this website. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, or completeness of the information and opinions contained on this website. Consequently, MVIS Blog assumes no liability for the accompanying information, which is being provided to you solely for evaluation and general information. This website does not contain inside information, proprietary or confidential information learned or disclosed as part of employment relationships or under nondisclosure agreements or otherwise.