STHC - Future Share Price Estimate
Some things to note before I go into the price target, my undergraduate degree was in mathematics and my masters degree is in STEM Education, so I understand many of the concepts that go into the maths behind stock evaluation. However, no matter how much data we have, stocks are always driven by investor attitude and speculation. So while we may have an estimate that seems fine on paper, it can always come in much higher than expected, or come in lower. This post is just to show where we see the price going, why it is going there, and possible variables that I did not calculate (and why).
There are key definitions to consider, which I will lay out here:
The key point here being these figures are "based on only 15,000 tonnes of graphite production/year, projected annual EBITDA of $19 million and an 84.7% IRR over 15 years." (EBITDA meaning Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company's operating performance).
This lines up well with it being ideal for the growth of EV batteries, as well as the fact they can output this graphite at a decent rate.
*Note: this is where I will mention that Saint Jeans Carbon, Inc. has agreed to an off-take agreement with Ameca Mining, which essentially means they are legally required to buy a minimum amount of 7500 tonnes of graphite annually. Also, per the Ameca website, there are off-take agreements on the table with Indian companies.
Also note that 70% of graphite production is from China. Also, the "flake" graphite is what is needed for EV batteries, which China does not have much of. This means any new deposit located outside of this regime would be a much better source of graphite for both political and economic reasons.
So, to determine the industry growth potential, I referred to New York University's own "PE by Sector" report.