Stonk Research

Chapter 3 Valuations

3.1 Earthrenew

Government of canada already funding case studies for erth.

Essentially the government is subsiding unproven companies like cielo, and/or helping fund earth renew, incredibly likely that earthrenew would qualify for free money.

With the degradation of land [7], we need to start to feeding the land again. The industrialization of agriculture must give back to the soil and store carbon in the soil again.

As for price target, if earthrenew manages to scale production to 241,000, and 405000, would expect a valuation of 10 times pe.

With fertilizer prices at 900 (expect this range for a few years until russia blows over), thats about

(3.1) \begin{equation} x = 241000*900*0.30*10 = 650700000 \end{equation}

So valuation of 650 million, if they manage to hit 405000, expect 1 billion dollar market cap, and the regenerative properties are very useful for storing carbon, so can expect this premium even if the company earns less than 0.30 margin (probably higher because lower cost inputs at the moment).

(3.2) \begin{equation} x = 405000*900*0.30*10 = 1093500000 \end{equation}

From sales call 24 to 27 million, hot industries, some reports indiciating that it will take 2 or 3 years for the market to go back to normal with the russia invasion, the topsoil erosion cant be fixed overnight

Food yields will go down because of

  • • topsoil erosion

  • • reduction in fertilizer usage

  • • food will cost more because it is more scarce, causing more supply chain disruptions?

  • • value added product, fertilizer is custom formula developed and tested by earthrenew.

  • • explanation to how traditionally fertilizer companies is pretty bad for the environment, very useful nutrients in the rocks