How did you estimate profit margins Vycid?
Educated guess. Yes - that means "I don't know". I am fairly confident I am close enough to reach a reasonable conclusion, though, which is what is important. I have estimated conservatively; AM will have to perform exceptionally well to be worth more than my price target.
I've estimated that it costs FC $1.50/GH currently. That will drop for Gen 2. Based on estimates for the competition (which are much higher, in general), I think it is possible he will continue to dominate for the next year - although a 75% profit margin is pretty extreme. I'm sorta playing the waiting game with the year-forward margin. It's not going to go up much (obviously it's impossible to go higher than 100% anyway), but it could go down a lot if the competition shows unexpected strength.
30% is a very impressive profit margin, but not out of the question for year 3 of an immature industry.
20% beyond year 3 is very generous. Most mature companies do not make that kind of margin, and ASIC mining is a low-barrier industry, so that's all faith in Friedcat right there.
20% profit margin is very generous? The largest company in the world has a 22% net profit margin and gross margins in the high 30s, which is common knowledge among investors with a 'pedigree' in value investing.
You can't see why ASIC mining is going to be a low-margin industry? Exceptionally low startup cost and startup time, fast breakeven, little regulatory difficulty in many jurisdictions.
You're incorrect, BTW. Walmart's profit margin is 3.67%. Royal Dutch Shell, 5.2%. Exxon Mobil, 8.98%.
http://en.m.wikipedia.org/wiki/List_of_largest_companies_by_revenue
I knew I was dealing with an amateur masquerading as an analyst. Apple is the largest company in the world, with a market capitalization of $412 billion. Exxon Mobil is second with a market capitalization of $391 billion and Walmart isn't even in the top 10 with a market capitalization of $244 billion. This is all VERY common knowledge in investment analyst circles...
Thanks for linking a wikipedia page on highest revenue companies, I got a good laugh out of you using it to justify your argument in claiming that I'm not correct.
Careful with those accusations.
Market cap measures VALUE. So the most valuable public company in the world is the one with the highest market cap. Not the largest. If you knew the first thing about valuation you would know this.
An honest listing of company size NEVER uses market cap. It is usually revenue (sometimes number of employees, depending on what you are looking for).
Based on this information, why should we be unsurprised that the company with the highest market cap also has such a high margin?
Really, all you have done is proven that 20% margin is exceptional.
That's the best you can come up with?
It was an implicit statement; and a fairly obvious one at that. Valuation is the pillar from which all investment discussions and analysis flows, ask anyone in the finance industry what the largest company is and they'll list companies by market cap, not revenue.You're a fucking moron. Do a google search for "biggest company". Wikipedia, CNN Money, Forbes - all use revenue.
Don't attempt to backpedal with some "oh, well, only value matters" argument. You said "size", I responded to that, then you attacked me for my ignorance, despite the fact you were clearly demonstrating your own, and that I provided evidence you were incorrect.
The point here is - 10% margin is quite good, on average. That is fact.
(Do a google search for "most valuable company" too.)