Marketing efforts are accelerating. Most of the company's astaxanthin sales growth has been generated by adding new customers, primarily small natural product stores. Social media and other business development programs now are being geared up to boost same store volume at those outlets. Larger chains are being targeted, as well. In the year just ended bulk sales represented 65% of total revenue; retail, 35%. The shift to greater retail business promises to lift sales and margins in the current fiscal year.
Volume also should benefit from capacity expansion. Cyanotech boosted its growing area by 33% last year. That additional capacity now is ramping up. Consumer demand for astaxanthin continues to exceed demand, so Cyanotech should have little trouble finding outlets for its higher level of production.
We are raising our fiscal 2013 (March) earnings estimate by a nickel to $.60 a share (fully taxed). Our sales estimate is unchanged at $30 million (+22%). Above average growth could be sustained well into the future. In 2-3 years earnings could attain $1.00 a share. Applying a P/E multiple of 15x suggests a target price of $15 a share, potential appreciation of 125%.
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